Cabinet approves formation of JVs with state governments

On December 30, 2015, the cabinet approved the formation of JV companies with various state governments to mobilise resources for undertaking rail infrastructure projects across the respective states. The JV companies will be formed with equity participation of the MoR and the respective state governments with an initial paid-up capital of Rs 1 billion based on the quantum of projects to be undertaken. The initial paid- up capital contribution of the MoR would be limited to Rs 500 million. Any further infusion of funds or equity for the projects will be done only after the necessary approval of the project and its funding. The JV can also form a project-specific SPV with equity holdings by other stakeholders such as banks, ports, PSUs, and mining companies. This step has been taken to ensure greater participation of state governments in the implementation of railway projects both in terms of financial participation as well as decision-making and facilitating faster statutory approvals and land acquisition.