Railways minister Dinesh Trivedi's proposal for the setting up the Pradhan Mantri Rail Vikas Yojna — a pet project of Trinamool Congress chief Mamata Banerjee — has been shot down by the finance ministry.
The reason given for rejecting the proposal was lack of funds. The decision was taken at a top level meeting last week comprising senior officials of the ministries of finance, program implementation, planning commission and the railways, highly placed sources said.
Rejecting the ambitious idea, the finance ministry has also asked the railways to scrap pending projects that have been accumulating huge time and cost over-runs.
Until April last year, 381 rail projects costing a whopping Rs 2,59,466 crore were pending. These include 129 projects for construction of 14,094 km of new lines at a cost of Rs 1,00,408 crore, 45 projects of gauge conversion costing Rs 33,025 crore, 166 projects of line doubling costing Rs 40,733 crore, 39 projects of electrification costing Rs 4,100 crore and two projects under the Dedicated Freight Corridor scheme costing Rs 81,200 crore.
Pushed by the finance ministry and planning commission, a meeting of the extended railway board was held last week to review of the ongoing and long-pending projects.
"The exercise of marking out projects that can be scrapped is being worked out," top sources said.
The concept of a PM Rail Vikas Yojna — incorporating a non-lapsable fund — was floated by then railways minister Mamata Banerjee in her budget speech in February last year.
With rail finances in a precarious state, both Banerjee and Trivedi had been actively pursuing the idea at a series of meetings with Prime Minister Manmohan Singh and finance minister Pranab Mukherjee over the past months.
The setting up of the authority will ensure that non-viable railway projects, particularly in the Northeast, would be declared as "national projects" and be eligible for entire funding by the central government.
Significantly, Trinamool has lately been engaged in fervent efforts to expand its political base in the North East.