Cabinet nod for state-level JVs with Indian Railways
he Union Cabinet has cleared formation of joint ventures between Indian Railways (IR) and state governments with initial paidup capital of ` 100 crore. The move to bring states on board for executing rail projects is expected to ease the pain of acquiring land and allow sharing of the cost burden, a government release said. It will also speed up languishing projects and help complete new projects on time.
Further infusion of fund, over and above the ` 100 crore of initial paidup equity, shall be done after approval of the project and its funding at the level of appropriate competent authority. The initial paid-up capital of IR has been capped at ` 50 crore for each state. The JVs could also form project-specific special
Tpurpose vehicles with equity holding by other stakeholders like banks, ports, public sector undertakings and mining companies.
Besides financial participation of states, the JV route for railway projects should facilitate faster statutory approvals. It will benefit local industries like cement, steel and power in getting their raw materials.