Friday, August 25 2006 10:01 Hrs (IST) - World Time -

New Delhi: A Special Purpose Vehicle will soon be set up under the Railways Ministry to implement the ambitious Rs 66,000 crore rail freight corridor that aims at linking the four metros and weaning away goods traffic from roads.

The SPV, cleared by the Cabinet today, will help in time-bound execution of the rail freight corridor, which will broadly run parallel to the existing railway lines connecting Delhi, Mumbai, Chennai and Kolkata, Parliamentary Affairs Minister P R Dasmunsi told reporters here.

The SPV will have the status of a Railway Administration under the Railways Act, 1989, and will exercise powers and discharge the responsibility for the functions assigned to it under the concession agreement, he said after the Cabinet meeting.

"The SPV, which will be wholly-owned by the Railways, will be a sort of Public Sector Company exclusively for implementing the project," sources said.

"It would have authorised capital of Rs 4,000 crore and initial paid-up capital of Rs 50 crore," the sources added.

Phase-I of the corridor would cover Ludhiana-Howrah and Delhi-Mumbai (Rs 22,000 crore) and phase-II between Delhi- Chennai and Kolkata-Chennai. The multi-billion dollar project would also connect the two quadrilaterals.

"The SPV will also perform similar functions in respect of future phases of the corridor, including those connecting the other legs of the Golden Quardilateral and its diagnols," Dasmunsi said.

He said the Cabinet decision will also help in reducing the transit time and cost of rail transport, which would enable the Railways corner a lion's share of freight traffic.