Konkan Railway Merger With Indian Railways Stuck Over States’ Equity Demands And Ownership Transfer

Mumbai: The proposed merger of Konkan Railway Corporation Ltd (KRCL) with Indian Railways remains uncertain as the Railway Ministry has made it clear that integration can happen only after the corporation becomes 100 per cent owned by the Centre. The status of the participating states' equity has emerged as the key hurdle, with Goa agreeing to transfer its stake, Karnataka seeking an exit mechanism and Maharashtra demanding reimbursement of its share capital contribution.

Railway Ministry responds to Lok Sabha query

The position was conveyed by the Railway Ministry in response to Lok Sabha Unstarred Question No. 4104, raised by BJP MP Kota Srinivasa Poojary. KRCL was incorporated in 1990 to construct and operate the 739-km railway line between Roha in Maharashtra and Thokur in Karnataka, linking Mumbai with Mangaluru through the Konkan region. The corporation originally had five shareholders the Ministry of Railways and the governments of Maharashtra, Goa, Karnataka and Kerala.

At present, the Centre holds the largest share at 66.79 per cent, followed by Maharashtra at 14.91 per cent, Karnataka at 10.17 per cent, and Goa and Kerala at 4.07 per cent each. The Railway Ministry said KRCL's infrastructure, now around three decades old, requires substantial investment for asset renewal and replacement, tunnel rehabilitation, safety works and capacity enhancement. It therefore asked the shareholder states either to contribute towards the required capital expenditure according to their shareholding or relinquish their equity to the Ministry.

States take different positions on stake transfer

The response shows differing positions among the states. Goa has agreed to transfer its shareholding to the Ministry of Railways. Maharashtra, however, has sought reimbursement of its share capital contribution, while Karnataka has sought various options to exit KRCL. The government response does not indicate that Maharashtra's or Karnataka's requests have been resolved.

The Ministry said any merger or integration with Indian Railways would be subject to KRCL becoming a 100 per cent Central Government-owned entity. The process would also have to comply with the existing Shareholding Agreement, which remains valid until all KRCL liabilities are discharged, besides requiring corporate, legal and administrative approvals.

The issue is also significant for the long-pending demand to double the Konkan Railway line. Only around 55 route km has been doubled, covering Roha-Veer and Madgaon-Majorda. A feasibility survey for doubling 263 km of identified sections has been sanctioned to increase capacity. However, the Railway Ministry has not said that the third financial restructuring package has dedicated funding specifically for doubling. The restructuring covers capital expenditure, safety, capacity augmentation, asset replacement and passenger amenities.

What a merger could mean for Konkan Railway

A merger could bring Konkan Railway under direct Indian Railways control, potentially making funding and project approvals easier. It could also help coordinate capacity expansion, safety upgrades, asset renewal and doubling works with the wider railway network, while reducing the complications of a multi-state ownership structure.

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