PRESS RELEASE
RailTel Corporation of India
Dated 31 July 2003

RaiTel and Ministry of Railways sign agreement on Right of Way and OFC related assets Transfer

A comprehensive agreement defining relationship between Indian Railways and RailTel has been signed between RailTel and Ministry of Railway on 30th July, 2003. The agreement provides for use of transferred assets of Railways by RailTel, exclusive Right of Way facility along the railway track for Rail Tel for entire Indian Railways, use of land and other assets, maintenance of assets and revenue sharing between them.

This supercedes the MoU between Rail Tel and Railways which was in operation for quite 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 Railways has transferred about 10000 kms of OFC assets worth Rs. 250 crores to Rail Tel for commercial use of surplus bandwidth. Moreover, Rail Tel gets the way leave facility for a period of thirty years on a fixed charge of 3% of Rs 378 crore Right of Way charges as assessed by the consultant. There will be a moratorium period of 5 years.It also provides for revenue sharing arrangement at 4% on gross revenue earned by Rail Tel. With the signing of this agreement approximately 600 microwave 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 would 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 would also treat 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. Rail Tel will provide adequate support to Railways for such maintenance activities. This arrangement will keep the OFC maintenance costs to bare minimum as well as ensure that the system is timely attended by the Railway staff.

Railways will also facilitate RailTel in establishing Cyber Cafes at stations and in trains on requirement from RailTel.

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