New Delhi: Ministry of Railways signed a joint venture agreement with government of Odisha on Tuesday for development of railway infrastructure in the State.
Official sources said, the company shall identify projects to be developed and find avenues for financing of the same. While both the parties shall be essentially funding part of such identified projects, project specific SPVs shall be formed after financial closure of the project.
In view of the growing demands for railway lines in various states and huge requirement of funds to execute them, Minister for Railways had announced in his budget speech regarding setting up of joint ventures with States for focused project development, resource mobilization, land acquisition, project implementation and monitoring of critical rail projects.
The MoU envisages formation of a joint venture company having 51% stake of the State government and 49% stake of Ministry of Railways. The company will primarily identify projects and possible financing avenues in addition to Government of India and the State government. After finances for a project are tied up, project specific SPVs or special purpose vehicles shall be formed. These SPVs can have other stake holders from Industries, Central PSUs, State PSUs etc. However, the JV companies shall be mandatory stake holders with minimum 26% shares in the SPVs.
So far 17 State governments have consented for formation of such companies in collaboration with the Ministry of Railways for development of rail infrastructure in their respective States. Draft MoUs have been sent to these State governments and discussions were also held with them to clarify various provisions of the MoU.
MoUs have already been signed by the Ministry of Railways with seven State governments such as Odisha, Maharashtra, Chhattisgarh, Andhra Pradesh, Telangana, Kerala and Haryana.