The central government has cleared a proposal to float joint venture companies with various states to mobilise resources for rail infrastructure projects, according to an official statement.
The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday decided that the proposed JVs would be formed with equity participation of the Ministry of Railways and concerned state governments.
Each joint venture would have an initial paid-up capital of Rs 100 crore based on the quantum of projects to be undertaken. The initial commitment of the Ministry of Railways would be limited to Rs 50 crore for each state. Further infusion of funds or equity for the projects will be done only after approval of the project and its funding by the appropriate authority.
The joint venture can also form project-specific special purpose vehicle with equity holding by other stakeholders like banks, ports, public sector undertakings and mining companies.
This would ensure greater participation of state governments in implementation of railway projects both in terms of financial participation as well as the decision-making process, the statement said.
This will also facilitate faster statutory approvals and land acquisition. Besides, the move will help cement, steel and power plants in getting the necessary rail links to transport their raw material and finished products.