The Railways' move to enter into joint ventures with state governments to start projects for each state has now got Cabinet approval.

Last week, it entered into such a memorandum of understanding with Andhra Pradesh and Kerala. An MoU broadly on these lines was also signed earlier with Odisha. The Railway Minister had added that they have got commitments from 17 states, including Maharashtra, for such joint ventures.

The Union Cabinet has given its approval to allow the Ministry of Railways to form joint venture companies with the State Governments to mobilise resources for undertaking various rail infrastructure projects in states, said a release.

The joint venture companies would be formed with equity participation from the Ministry of Railways and the States concerned. Each joint venture would have an initial paid-up capital of Rs 100 crore based on the quantum of projects to be undertaken. The Ministry of Railways’ initial paid-up capital will be limited to Rs 50 crore for each State.

Further infusion of funds/ equity for the purpose would be done after approval of the project and its funding at the level of the appropriate competent authority.

The joint venture could also form project-specific SPVs with equity holding by other shareholders including banks, ports, public sector undertakings, and mining companies. The joint venture exercise would ensure greater participation from States in the implementation of railway projects, both in terms of financial participation as well as in the decision-making process. This will also facilitate faster statutory approvals and land acquisition. Besides the travelling public, cement, steel and power plants would get the necessary rail links for transportation of their raw material and finished products.

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