Cabinet nods formation of JVC with State Governments for Rail Infra Projects
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved the formation of Joint Venture Companies with various State Governments to mobilize resources for undertaking various rail infrastructure projects in the States. The initial paid up capital of Ministry of Railways would be limited to Rs. 50 crore for each State.
The details of Joint Venture are as follows:-
1. Joint Venture Companies would be formed with equity participation of Ministry of Railways and concerned State Government(s).
2. Each Joint Venture would have an initial paid up Capital of Rs. 100crore based on the quantum of projects to be undertaken. Further infusion of fund/equity for the purpose of the projects shall be done after approval of the project and its funding at the level of appropriate competent authority.
3. Joint Venture can also form project specific SPVs 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. This will also facilitate in faster statutory approvals and land acquisition.Besides travelling people, various cement, steel, power plants etc. would get the necessary rail link for transportation of their raw material and finished products.