Rlys transfers OFC network to RailTel

31 July 2003, Hindu Business Line

THE Railways has transferred its 10,000 km optical fibre cable (OFC) network along with right of way (RoW) along il tracks to its subsidiary RailTel Corporation of India Ltd.

The broadband assets have been valued at Rs 250 crore and form the equity contribution of the Railways in the company.

An agreement determining the relationship between RailTel and its parent was signed on Wednesday and provides for the use of transferred assets by the company and exclusive RoW along the entire 53,000 km network of the Railways.

The agreement also lays down the modalities of use of Railway land, maintenance of the OFC network and revenue sharing between the two entities, an official release said here today. The agreement supersedes an earlier memorandum of understanding that led to the setting up of RailTel in September 2001.

As per the new agreement, the RoW has been valued at Rs 378 crore and RailTel would pay the Railways a fixed charge of three per cent after a moratorium of five years.

It also provides for a payment of four per cent of the gross revenue earned by RailTel to the Railways. 
In addition to sharing revenue, RailTel would provide 30 telecom channels to the Railways for station-to-station communication for train operations free of cost and treat the Railways as a preferred customer for its future bandwidth requirements.

The OFC network would be maintained by the Railways along with their `Four Quad' communication cable network, and RailTel would not have to employ additional staff for the purpose.

"The OFC cables have been laid 20 cm below the four quad cables of the Railways in a common trench and would have led to problems if there were two sets of maintenance staff. We will pay the Railways a nominal fee for maintaining our network," a RailTel official said.

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