Railways signs MoU with Haryana for joint venture company

The Railways Ministry on Thursday signed an MoU with the Haryana government for formation of a joint venture company for development of rail infrastructure in the state.

Railways Minister Suresh Prabhu said that this was an "achievement" for the railways and it would help in "focused" project development.

"This is a great achievement. There are demands for new railway lines in many states which require huge funds. Setting up of these joint ventures with states will result in focussed project development, resource mobilisation, land acquisition and monitoring of critical rail projects," he told reporters here.

Prabhu had announced in his 2016-17 budget speech that his ministry would work in tandem with state governments for developing rail infrastructure.

He also said that World Bank as well as Asian Development Bank have also shown interest in financing such projects.

"We also plan to redevelop 400 stations across the country. With the signing of these MoU, many problems like financing, land acquisition will be solved," he added.

Haryana Chief Minister Manohar Lal Khattar, who was also present on the occasion, said that this would help in the state's overall development.

According to the MoU, a joint venture company will be formed with 51 percent share of the state government and rest with the ministry.

"The company will primarily identify projects and possible financing avenues in addition to the state and central government. After finances for a project are tied up, project specific Special Purpose Vehicles (SPV) shall be formed. These SPVs can have other stakeholders from public sector undertakings," said a ministry statementd.

"However the the joint venture companies shall be mandatory stakeholder with minimum 26 percent share in the SPVs."

The most important aspect of the MoU is that the land ownership will vest with the SPVs so that it can exploit its commercial potential.

"At the end of the concession period, the railways will have option to take over the assets at nominal price," it added.

So far six states -- Odisha, Maharashtra, Chhattisgarh, Andhra Pradesh, Telangana, Kerala, have signed these MoUs, while 17 state governments have agreed to this proposal.

--IANS

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