Union Cabinet has allowed the railways to form joint ventures with states in an attempt to allow participation to states in infrastructure development.
A cabinet meeting chaired by Prime Minister Narendra Modi paved the way for Centre-state joint ventures to mobilise resources for speedy implementation of rail projects. These ventures will be responsible for identifying, acquiring land, managing finances and project monitoring.
“Each joint venture will get an initial paid-up capital of Rs 100 crore, based on the quantum of projects to be undertaken,” a cabinet statement said.
Of the Rs 100 crore paid-up capital, Rs 50 crore will be paid by the railways initially. Further infusion of fund for the projects will be done after the project gets approvals.
Calling the decision a milestone, Railways minister Suresh Prabhu tweeted, “Now new projects jointly owned with railways. Huge boost to infrastructure development. Priority of viable projects are decided jointly with due process.”
The proposal to form joint ventures with states was first suggested by Suresh Prabhu’s maiden Railway Budget in 2015.
Before the concept of JVs came into picture, railways would sign MOUs with states to execute specific projects. States such as Kerala, Andhra Pradesh, Odisha and Maharashtra had signed agreements with the railways to execute projects.
In another decision, the cabinet also extended the tenure of Indo-German Science & Technology Centre (IGSTC) up to 2022.
Established in 2011, IGSTC has been supporting joint research and development projects in manufacturing, biomedical devices, healthcare and clean energy technologies.