The World Bank would be the anchor investor in the new Railway Development Fund, which would be used to fund the modernisation of Indian Railways, Railway Minister Suresh Prabhu has said.

“We have decided to work with the World Bank on creating a Railway Development Fund. This was already initiated. But now, we have taken it forward,” Prabhu said here yesterday after his meeting with World Bank officials.

Noting that the World Bank would be anchor investors in this new fund, along with other co-investors, Prabhu said, “This fund would be kick-started soon as there is unanimity in the World Bank leadership”.

He also said the World Bank leadership has realised that based on the performance in the past one year, Indian Railways is in the “right direction”.

However, Prabhu did not divulge the size of the fund, but indicated that it would be the largest ever provided by the World Bank to the Indian Railways.

Prabhu is here to attend a World Bank meeting on transportation. During his stay in the US capital, he also met officials of the International Finance Corporation, the US Transportation Secretary Anthony Renard Foxx, and some of the think-tanks.

The International Finance Corporation (IFC) would look into the possibility of revenue generation through non-railway operations, he said.

“To help us in monetisation issues, bringing in the global best practices. Globally, railways get 30-40 per cent of their income from non-railway operations. In India it is not even two per cent. So this is going to be a challenging time, particularly when Indian Railways would have to bear the additional burden of the Pay Commission,” he said.

During his meeting with Secretary Foxx, the two leaders decided to create an umbrella agreement with the Department of Transportation about the transportation sector in general.

“Today we also agreed to make a Railways-specific umbrella agreement with the Transport Department, which would help to work on many things,” Prabhu said.

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