'Funding no more a constraint'

Indian Railways has moved out of a phase of fund constraint to a state where funds are available and a shelf of projects ready to be financed. While the national transporter has a funding window open from the Life Insurance Corporation (LIC), it is finalising a structure of funds to be floated jointly with the World Bank.

Rail Minister Suresh Prabhu told Business Standard that Indian Railways was constrained last year by the lack of detailed project reports, which could be taken up for construction. "Some Rs 5.6 lakh crore worth of projects are ready with us now… Funding is no more a constraint for us," he said.

LIC has agreed to provide Rs 1.5 lakh crore over five years. The first tranche of Rs 30,000 crore was to come in the last financial year, but only Rs 2,000 crore was disbursed because of lack of project preparedness. "There are no commitment charges on funds with LIC, so we can draw anytime," Prabhu said.

With the World Bank, the Railways plans to float an independent fund that would provide both equity and debt finance to "all railway projects and not just the Indian Railways".