LIC, IIFCL may buy stake in Delhi-Mumbai corridor project

Life insurance major LIC and India Infrastructure Finance Company (IIFCL) are expected to acquire stakes in the government's ambitious $100-billion Delhi Mumbai Industrial Corridor project, an official said today.

The move comes after the Cabinet's decision to re-structure the DMIC Development Corporation (DMICDC), which will develop industrial enclaves along the Delhi-Mumbai rail corridor encompassing seven states.

As per the restructuring plan, the 51% stake held by IL&FS and IDFC would be transfered to government-owned financial firms, making DMICDC a deemed government company.

"The Department of Economic Affairs has proposed that LIC and IIFCL would take stake in the DMICDC," the official said.

The government holds 49% stake in the project.

Meanwhile, the Department of Industrial Policy and Promotion (DIPP) has moved a draft cabinet note to give 26% stake in the project to the Japanese government. Japan has expressed interest in buying stake.

"The Cabinet Committee on Economic Affairs is expected to soon take up the proposal where, Japanese government, LIC and IIFCL will take over the stake of IDFC and IL&FS in the DMIC project," the official added.

Japan intends to invest $4.5 billion in the project over the next five years.

DMIC Development Corporation (DMICDC) is a special purpose vehicle for implementing the ambitious project for building industrial enclaves along the Delhi-Mumbai rail corridor, encompassing seven states - Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.

The project which envisages creation of not only industrial townships but also new cities, is being supported by Japan.

An industry ministry official delegation headed by DIPP secretary PK Choudhery would visit Japan in April, to discuss about the investment details and progress of the project.

The Cabinet had approved equity restructuring of DMICDC and an expenditure of Rs 18,500 crore on development of infrastructure in September.