 "Railways discusses $30-bn fund with World Bank as anchor investor")
The Ministry of Railways is in talks with the World Bank for setting up a Railway Infrastructure Development Fund (RIDF) with a corpus of around $30 billion where the bank would act as the anchor investor. The fund will be utilised for implementing rail-based projects.
“Discussions have been initiated with the World Bank for setting up a Railway Infrastructure Development Fund of around $30 billion,” the rail ministry said in a statement detailing the achievements in the past two years of the Modi government, the first official confirmation of the sise of the much talked about fund.
Rail minister Suresh Prabhakar Prabhu had floated the idea of the fund after a visit to Washington DC in January 2016. Prabhu had told Business Standard in an exclusive interview last month the bank had expressed confidence in the railways’ ability to spend money judiciously.
“The corpus of that fund is yet to be decided but it may not be used only for Indian Railway projects and would be channelised for all rail-based projects including even Public Private Partnership (PPPs),” he had said.
The World Bank is understood to have given its in-principle approval for the creation of the fund and the proposal is now with the Department of Economic Affairs (DEA). “We are ready with the basic structure. We will take it forward once other formalities are in place,” a senior rail ministry official said.
“Discussions have been initiated with the World Bank for setting up a Railway Infrastructure Development Fund of around $30 billion,” the rail ministry said in a statement detailing the achievements in the past two years of the Modi government, the first official confirmation of the sise of the much talked about fund.
Rail minister Suresh Prabhakar Prabhu had floated the idea of the fund after a visit to Washington DC in January 2016. Prabhu had told Business Standard in an exclusive interview last month the bank had expressed confidence in the railways’ ability to spend money judiciously.
“The corpus of that fund is yet to be decided but it may not be used only for Indian Railway projects and would be channelised for all rail-based projects including even Public Private Partnership (PPPs),” he had said.
The World Bank is understood to have given its in-principle approval for the creation of the fund and the proposal is now with the Department of Economic Affairs (DEA). “We are ready with the basic structure. We will take it forward once other formalities are in place,” a senior rail ministry official said.
Another official close to the development said the fund to be created with World Bank as the anchor investor will be part of the government’s effort towards additional mobilisation of resources as the Gross Budgetary Support (GBS) extended by the finance ministry is not sufficient.
“There is a limit to the extent to resources that can be utilised through GBS. While the ministry will always continue to source more GBS, efforts like the World Bank fund would form a key part of the Extra Budgetary Resources,” he said.
GBS is the centre’s financial assistance extended to railways and forms an important component of the Central Plan of the government. The railways receives resources to the tune of around Rs 40,000 crore annually in the form of GBS from the finance ministry and pays dividend to the centre.
The World Bank fund will be part of the efforts to attract commercial finance for financially-viable railway infrastructure projects in India. The Indian Railways plans to invest Rs 8.5 lakh crore over the next five years including Rs 1.21 lakh crore in the current fiscal.