Eyeing greater financial role of states in execution of rail projects, Union Cabinet today approved the formation of Joint Venture companies with several states, which will enable the Centre to mobilise resources for various rail infrastructure projects.
Chaired by Prime Minister Narendra Modi, the Cabinet decided that the initial paid up capital of Railway Ministry would be limited to Rs 50 crore for each state.
The JVs envisage financial participation of the states as well as faster decision making process to ensure speedy implementation of rail projects in respective states.
Joint Venture Companies would be formed with equity participation of Railways and concerned state governments, according to a release.
Several rail projects are delayed due to financial crunch.
Each Joint Venture would have an initial paid up Capital of Rs 100 crore based on the quantum of projects to be undertaken. Further infusion of fund/equity for the purpose of the projects would be done after approval of the project and its funding at appropriate competent authority.
Joint Venture can also form project specific special purpose vehicles with equity holding by other stakeholders like banks, ports, public sector undertakings, mining companies, etc.
This would ensure greater participation of state governments in implementation of railway projects both in terms of financial participation as well as decision making process and will also facilitate faster statutory approvals as well as speedy land acquisition.
Various cement, steel, power plants etc. would get the necessary rail link for transportation of their raw material and finished products.