The Hindu Business Line : RITES project in Tanzania

The Union Cabinet has cleared a proposal allowing Railways subsidiary RITES Ltd to invest equity up to $8 million, with equity participation of 51 per cent, to execute a concession project of the Tanzanian Railway Corporation (TRC). The project envisages rehabilitating TRC and its operation and management for a period of 25 years, the Defence Minister, Mr Pranab Mukherjee, told reporters after the Cabinet Committee on Economic Affairs (CCEA) meeting here.

The Cabinet's decision would benefit RITES in securing the TRC concession, which was likely to have an equity Internal Rate of Return (IRR) of 43 per cent. Apart from return of equity, management of construction contracts, opportunity of leasing rolling stock and securing technical services, contract for this project and for operation and maintenance were likely to accrue to RITES, he said. The Cabinet also approved re-scheduling dates for redemption of preference shares by the Mazagaon Dock Ltd (MDL) from 1999-2000 to 2007-08.

It permitted MDL to pay arrears of dividend accumulated till 2005-06 amounting to Rs 47.08 crore in two equal instalments in 2006-07 and 2007-08 at an interest of 0.5 per cent per annum from 2006-07 along with yearly dividend on the outstanding balance of preference of shares from 2006-07. Delayed payment of annual dividend on outstanding preference shares from 2006-07 onwards would attract interest at 1 per cent interest per annum, Mr Mukherjee said.

The CCEA granted MDL an extension of time to redeem preference shares of Rs 98.98 crore in four equal annual instalments commencing from fiscal 2007-08.