Railways-RailTel Pact On Transfer Of Telecom Assets

31 July 2003, The Financial Express

The Railways has entered into an agreement with RailTel for transfer of its telecom assets. As per the agreement, the Railways will get 4 per cent share in the gross revenue of RailTel.

RailTel is a railway undertaking entrusted with the task of using its right of way for laying of optic fibre cable (OFC) for commercial purposes.

The agreement provides for use of transferred assets of the Railways by RailTel, exclusive right of way facility along the railway track for RailTel for Indian Railways, use of land and other assets, maintenance of assets and revenue sharing between them.

The agreement supersedes the MoU signed between RailTel and the Railways which was in operation for some time. The MoU had authorised RailTel to market the surplus capacity available in the existing OFC network of the Railways.

Under the terms of the agreement, the Railways has transferred about 10,000 km of OFC assets worth Rs 250 crore to RailTel for commercial use of surplus bandwidth. Moreover, RailTel gets the way leave facility for a period of 30 years on a fixed charge of 3 per cent of Rs 378 crore right of way charges as assessed by the consultant. There will be a moratorium period of five years.

With the signing of this agreement, approximately 600 microwaves towers have been put at the disposal of RailTel for lease to private and public enterprises in order to use their space.

As part of the agreement, RailTel will provide telecom services to the Railways for station to station communication bandwidth of 2 Mbps (30 channels) meant for train operations free of cost. RailTel will also treat the Railways as a preferred customer and give bandwidth at concessional tariff keeping the market prices in view.

The Railways will take care of maintenance facilities for OFC cable network through its existing infrastructure. RailTel will provide adequate support to the Railways for such maintenance activities. This arrangement would keep the OFC maintenance costs to bare minimum as well as ensure that the system was attended to timely by the Railway staff, said a press release.

The Railways will also facilitate RailTel in establishing cyber cafes at stations and in trains on requirement from RailTel.

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