Bengaluru: The state government and the Ministry of Railways on Monday signed a memorandum of understanding (MoU) in what is seen as a step towards realizing the city’s long-pending demand for a suburban railway system to address its perennial traffic congestion.

The MoU for the development of suburban railway system in Bengaluru was released by Railway Minister Suresh Prabhu and Chief Minister Siddaramaiah at a function here. Describing Bengaluru as a global city and technology capital of the country, Prabhu said it is the duty of the government, at the Centre and the state that transportation needs of the people are taken care of. “With this in mind, a decision has been taken to start suburban railway system for the city,’’ he said.

A special company would be set up for the project and it will be financed through an “innovative” way, Prabhu said. “It is no longer possible for either the state government or the central government to find money for the budget from their normal revenue source to finance entire infrastructure needs…. so we have to find an innovative way,” he said,

The minister said that it would not come into the Fiscal Responsibility and Budget Management Act of the state government. Pointing out that there were equity related concerns raised by the state government, Prabhu said they would be looked into.

Chief Minister Siddaramaiah, who expressed reservation over the Centre’s draft suburban rail policy’s financing pattern, said “the Minister (Prabhu) has now spoken about adopting innovative ways of funding for which the state government will provide its fullest cooperation. We are also fine with involving the private partners.”

Pointing out that the draft mentions financing pattern as 20 per cent by the Central government and 80 per cent by the state government, he said it would be a burden on Karnataka. He proposed a 50:50 financing pattern and requested that the Centre should share the land cost also.

At the function organised by the South Western Railway, Prabhu and Siddaramaiah unveiled the plaque for laying of foundation stone for new coaching terminal at Baiyyappanahalli aimed at decongesting other terminals in the city. They also flagged off KSR Bengaluru/Yesvantpur-Shivamogga train and MEMU train between KSR Bengaluru and Ramanagara.

Promising that Bengaluru-Mysuru track doubling would be commissioned before March-end, Prabhu also sought the state government’s cooperation in the quadrupling of the line between Bengaluru to Whitefield as it will help in easing the traffic congestion.