Draft MoU for SPV's by railways needs revision: Jayalalithaa

Tamil Nadu Chief Minister J. Jayalalithaa on Thursday said the draft memorandum of understanding (MoU) circulated by the ministry of railways for forming joint venture companies needs revision.

In a letter to Prime Minister Narendra Modi, text of which was released to the media here, Jayalalithaa said the draft MoU circulated by the ministry does not address the concerns of the state.

The Indian Railways had said it would enter MoU with state governments to implement railway projects jointly.

Jayalalithaa told Modi that Tamil Nadu had prioritised Chennai - Thoothukudi Freight corridor, high speed passenger rail link - Chennai - Madurai - Kanniyakumari, and high speed passenger rail link - Madurai to Coimbatore - for implementation through the formation of a special purpose vehicle (SPV) with the participation of the state and ministry of railways.

Jayalalithaa told Modi: "We had also indicated some specific conditions for the establishment of the SPV. Since the land is typically provided by the State Government, this should be treated as part of the State Government's equity contribution to the SPV at market value.

"Matching equity contributions from the Ministry of Railways could be in cash or in the form of land owned by the Railways or other Central Government departments."

According to her, the equity contributions in cash should be made in time to avoid project delays and governance structure of the SPV should be well balanced with adequate participation by the state government.

"In the draft MoU circulated by the ministry of railways, these concerns are not adequately reflected.

"The draft MoU would require revision before it becomes acceptable to the government of Tamil Nadu," she said.

Listing out various railway projects for Tamil Nadu announced during the presentation of railway budgets, Jayalalithaa urged Modi to expedite them with allocation of adequate funds.