Cabinet okays IWAI raising Rs 660 cr through bonds this fiscal

The Cabinet today gave permission to the Inland Waterways Authority of India (IWAI) to raise Rs 660 crore through bonds in the current fiscal for development and maintenance of national waterways.
Last year, the authority was allowed to issue infrastructure bonds worth Rs 1,000 crore for the first time. However, it could raise only Rs 340 crore.
"The Cabinet, chaired by Prime Minister Narendra Modi, has approved the revalidation of permission to raise Extra Budgetary Resource (EBRs) of Rs 660 crore as Government of India Bonds by IWAI in 2017-18," an official statement said.
The permission has been given because the budgetary and external financial support for funding development and maintenance of 106 new national waterways is grossly inadequate, it said.

The proceeds from the bonds will be utilised for development and maintenance of national waterways. The funds will be used exclusively for capital expenditure to improve infrastructure funding.
The principal and interest of the EBRs worth Rs 660 crore will financed by the Central government by making suitable budgetary provisions. The interest payment will be on semi- annual basis and the principal on maturity, it added.

The whole exercise would be undertaken by IWAI through appointment of lead managers and coordination with Sebi.
Funds will be released in two tranches. Borrowing in the last quarter of the year 2017-18, especially during the last two months of the year 2017-18 would be avoided, it added.

According to the government, the investment to be undertaken for development of national waterways on identified projects in 2017-18 is estimated to be approximately Rs 2,412.50 crore.
The World Bank has sanctioned a loan of USD 375 million for Jal Marg Vikas Project (JMVP) on April 12, 2017.
During 2017-18, out of estimated expenditure of Rs 1,715 crore for JMVP, it is expected that the World Bank would remit a loan amount of Rs 857.50 crore. Accordingly, the total requirement of funds in 2017-18 is Rs 2,412.50 crore.
During the year 2016-17, IWAI was allocated a sum of Rs 296.60 crore for creation of capital assets which has been reduced to Rs 228 crore in budget estimate of 2017-18. Raising bonds is intended to bridge this gap, the statement added.