New Delhi: Asian Development Bank (ADB) has agreed to extend $ 600 million to Railways during 2002-05 but attached preconditions such as confining the loans to those areas where the public utility has a "clear competitive edge" over other modes of transport.

"We have asked Indian Railways to develop a route map on the basis of which we will process our railway sector loan of $ 300 million, followed by a second loan of $ 300 million in 2005 for railway improvement," a top ADB official said on August 29.

ADB feels Railways should operate in only those areas where it had a clear competitive edge over the other modes of transportation, including container operation, he said.

"The assistance will be selective and confined only to those areas that are consistent with its future business strategy," the ADB official said.

ADB had prepared a report on how to restructure the railways, making it a financially viable entity, way back in 1999, the official said, but added, "the results were limited".

ADB has asked Railways to be a "market-oriented service provider", to reorient operations and introduce a corporate structure and culture, he said.

The Rakesh Mohan committee had also suggested corporatisation of Railways.

Provided the conditions are fulfilled, the official said, "ADB would go for long- term commitment rather than one-time assistance."

ADB's efforts to assist Railways comes after a government request for "quick dose of help", preferably this year.

PTI