MUMBAI, JULY 7: There's good news for investors in the bonds floated by the Konkan Railway Corporation (KRC). The Railway Board has decided to award an annual soft loan of over Rs 200 crore each year for 10 years to help the corporation pay the interests as well as a substantial amount of the loan.According to the decision taken at a meeting held between KRC officials and the members of Railway Board last month, the corporation would receive interest free loan of Rs 260 crore for each of the next two years, which will then increase to Rs 300 crore in 2001-02 and to Rs 400 crore two years later. The Board will stick to the Rs 400 crore mark for the rest of the period.According to sources, this loan will go a long way in helping KRC clear off its debts. Till date the corporation had to repay nearly Rs 3090 crore to its investors. The interest on the debts itself amounts to Rs 309 crore this year, but officials believe that with the allocation of funds from the Board, the interest will shrink to just overRs 10 crore by 2007-08.The Rs 3730 crore loan will be interest free and will be used for paying up the interest first and then for repaying the loan. ``This is a natural follow up of the `letter of comfort' given by Railway Minister Nitish Kumar during his budget speech in Parliament in February,'' said an official. The minister had promised that the Union Government would stand by its guarantee to the corporation that it would help in repaying the loan.Officials at KRC believe that the financial position of the corporaiton would stabilise enough in 10 years to be able to repay the loan in a lumpsum amount at that time. ``All that the KRC asks for is seven years, within that period, we will start making major profits,'' said a senior officer.The corporation is making losses of nearly Rs one crore every day. Its novel efforts at marketing freight traffic through the RO-RO (roll on - roll off) scheme are slowly stabilising. ``I would have loved to get two rakes during the monsoon, the time when roadtransporters minimise operations. But they were called back by the Railways for operations in Kargil,'' a senior official.
