Cabinet gives green signal to formation of Joint ventures between railways, states
Updated: Dec 30, 2015 05:06:03pm
New Delhi Dec 30 (KNN) Union Cabinet gave approval to the formation of joint venture companies with state government to mobilise the resources necessary to embark on various railway infrastructure projects.
The decision was taken on Wednesday in the Cabinet which was chaired by PM Narendra Modi. The Cabinet decided to limit the initial paid up capital to Rs 50 Crore for each state.
The motive behind the formation of these joint ventures is to provide a solution to the financial crux bumping into several rail projects. It was envisioned that financial participation of the states through joint ventures will fuel the decision making process and speedy implementation of rail projects in respective states.
As per a release, the Joint Ventures would be formed with equity participation of the state government concerned and the Ministry of Railways. An official statement was made declaring that each venture would have an initial paid up capital of Rs 100 crore based on the projects to be undertaken. It was further stated that additional infusion of fund/equity for the purpose of the projects would be done once the project is approved.
The joint ventures will focus on the formation of project-specific special purpose vehicles with equity holding from other stakeholders such as banks, ports, public sector undertakings, mining companies, and others.
The decision was taken considering the importance of financial role of State government in execution of rail projects. It was evident from the official statement made in the Cabinet. “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 and will also facilitate faster statutory approvals as well as speedy land acquisition”. (With PIB Inputs)
The decision was taken on Wednesday in the Cabinet which was chaired by PM Narendra Modi. The Cabinet decided to limit the initial paid up capital to Rs 50 Crore for each state.
The motive behind the formation of these joint ventures is to provide a solution to the financial crux bumping into several rail projects. It was envisioned that financial participation of the states through joint ventures will fuel the decision making process and speedy implementation of rail projects in respective states.
As per a release, the Joint Ventures would be formed with equity participation of the state government concerned and the Ministry of Railways. An official statement was made declaring that each venture would have an initial paid up capital of Rs 100 crore based on the projects to be undertaken. It was further stated that additional infusion of fund/equity for the purpose of the projects would be done once the project is approved.
The joint ventures will focus on the formation of project-specific special purpose vehicles with equity holding from other stakeholders such as banks, ports, public sector undertakings, mining companies, and others.
The decision was taken considering the importance of financial role of State government in execution of rail projects. It was evident from the official statement made in the Cabinet. “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 and will also facilitate faster statutory approvals as well as speedy land acquisition”. (With PIB Inputs)
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