Photo: Hindustan Times
Photo: Hindustan Times

Cabinet nod for revamping 400 railway stations

Projects to be delivered using contract method called Swiss challenge; Jaitley says stations to boost economic activity

New Delhi: The Union cabinet on Thursday approved a proposal to redevelop 400 railway stations using a contract method called the “Swiss challenge".

Finance minister Arun Jaitley said such stations could become catalysts of economic activity in their surrounding areas.

“These 400 railway stations in virtually 400 centres of the country will become centres of developmental activity. The railway ministry and board will now take this process forward," Jaitley told reporters after a cabinet meeting in New Delhi on Thursday.

Jaitley explained that under the Swiss challenge method, “any person with credentials can submit a development proposal to the government for the development of classified railway stations. That proposal will be put on the Internet and a second person can give suggestions to improve or beat that proposal".

He added that an expert committee will accept the best proposal and the original proposer will get a chance to accept it if it is an improvement on his own proposal.

Commenting on the cost of the project, Jaitley said, “The cost will be of the developers, the government and public will get its benefits. It will be revenue-sharing, cash, space-based."

After the cabinet decision, railway minister Suresh Prabhu tweeted, “Very big step in passenger service, modernization, mega investments, big job creation. Cabinet approve. Budget announcement fulfilled. Stn (Station) dev (development) with complete transparency with PPP. Top class amenities, shopping etc. Cities get icons." PPP is short for public-private partnership.

The Swiss method, however, is already in use in states such as Karnataka, Rajasthan, Madhya Pradesh and Gujarat for road and housing projects.

In 2009, the Supreme Court approved the method for award of contracts.

This method can be applied to projects that are taken up on a PPP basis but can also be used to supplement PPP in sectors that are not covered under the framework.

“The Swiss challenge has its own complexes. It requires the private sector to approach the government and make the initial investment. Provided that we are able to respond to the proposals, economic activity shall follow," said Vishwas Udgirkar, senior director at the consulting firm Deloitte.

The cabinet committee on economic affairs (CCEA) also approved setting up of of an intra-state power transmission system in Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra and Rajasthan at an estimated cost of 8,548.68 crore.

The transmission links are to help in evacuating the green power capacity being added in these states.

“Creation of an intra-state transmission system will facilitate evacuation of renewable power from generation stations to load centres," the CCEA statement said.

Having set an ambitious green energy target of generating 175,000 megawatts (MW) by 2022, India has also started work on setting up transmission corridors to supply green power across the national grid.

The cabinet also approved 700 crore of additional funds for recapitalization of weak regional rural banks (RRBs). These banks are unable to maintain their minimum capital to risk weighted assets ratio (CRAR) of 9%, and the cabinet decision will will help them improve this ratio, the cabinet note said.

“A strong capital structure and minimum required level of CRAR will ensure financial stability of regional rural banks which will enable them to play a greater role in financial inclusion and meeting the credit requirements of rural areas," it added.

The cabinet also approved the second phase of the eCourts project at an estimated cost of 1,670 crore.

It will enable universal computerisation, use of cloud computing, digitization of case records and enhanced availability of e-services through e-filing, e-payment gateways and mobile applications, etc.

The cabinet also gave its ex-post facto approval for the Repealing and Amending (Third) Bill, 2015, which was introduced in the Lok Sabha on 13 May, for repealing 187 redundant laws. The cabinet also approved the introduction of a new bill in the Lok Sabha for the repeal of 295 Acts.

The cabinet also gave its approval for a proposal to permit utilization of India’s capital contribution to the SAARC Development Fund (SDF) that will help in “promoting projects such as cross-border infrastructure. Such projects will help improve intra-SAARC trade and growth potential of the SAARC region, and also in promoting financial inclusion and social security..." SAARC stands for the South Asian Association of Regional Cooperation.

Utpal Bhaskar and Sayantan Bera contributed to this story.

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