The finance arm of the Indian Railways, Indian Railway Finance Corporation (IRFC) is in talks with the National High Speed Rail Corporation Ltd (NHSRCL) to finance the extended portion of the Ahmedabad-Mumbai High Speed Rail Project.

“The NHSRCL has already approached IRFC for further financing of the project or some financing for future projects. We are open to finance them for the extended projects. They are already in talks with IRFC for financing because of least cost funding,” Amitabh Banerjee, Chairman and Managing Director, IRFC, informed during an interaction on the sidelines of the listing ceremony of the company’s $750 million bonds on IndiaINX at GIFT IFSC recently.

Funding private sector

In order to further expand its funding purview, IRFC will now look to finance private players having operational linkage with Indian Railways. “As such, our memorandum of articles permit us to finance to any sector which has forward or backward linkage with Indian Railways including ports and logistics for connectivity. We can fund logistics sector if it helps augmenting the freight carrying capacity of Indian railways. We are open to fund them,” said Banerjee.

There are talks on certain parts of the railways being considered for privatisation including operation of high speed trains on certain routes. “With an investment of about ₹30,000 crore private players will procure their own rolling stock and run on these routes. So some of these have also approached us for financing the rolling stock because of the low cost funding we provide,” added Banerjee.

‘Caution needed’

For IRFC, Government of India has remained the largest client, and that will remain so at least for next 8-10 years because of the execution of the National Rail Plan, under which the government aims to spend ₹10-lakh crore to augment rail capacities and improve the infrastructure around it. “But in certain sectors, depending on the viability of the projects, we may look to fund private projects. But we have to be careful in lending to private sector as we have not had any NPA so far. These projects will have to be very well protected and ring fenced,” he added.

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