Cabinet approves formation of joint ventures with states for rail infrastructure

The union cabinet under chaired by Prime Minister Narendra Modi has given its approval for allowing the ministry of railways to form joint venture companies with state governments to mobilise resources for undertaking various rail infrastructure projects in states.

The JVs would be formed with equity participation of the ministry of railways and concerned state governments. Each JV would have an initial paid-up capital of Rs100 crore based on the quantum of projects to be undertaken.

The railway ministry will have a share of Rs50 crore in the equity capital. Further infusion of fund / equity for the purpose of the projects will be done after approval of the project and its funding at the level of appropriate competent authority.

The JV can also form project-specific SPVs with equity holding by other shareholders like banks, ports, public sector undertakings, mining companies etc.

The JV structure would ensure greater participation of state governments in implementation of railway projects both in terms of financial participation as well as decision making process. This will also facilitate in faster statutory approvals and land acquisition.

Besides travelling public, various cement, steel, power plants etc would get the necessary rail link for transportation of their raw material and finished products.