Indian Railways to set up Railways Development Fund with World Bank


 

To generate global funding of over $142 billion for building modern railway infrastructure, Indian Railways will set up Railway Development Fund with World Bank.

Indian Railways minister, Suresh Prabhu who was on a visit to the US said that World Bank will be anchor investor for Railway Development Fund along with other co-investors, as it has expertise in managing transport infra funding.

The minister however, did not say what will be the size of the fund and when it will be launched.

But, it is believed that the fund will be launch 2016-17 fiscal year, as India is scouting for funds to develop its ageing railway infrastructure across the country.

The government has ambitious plan to spend $1 trillion on building infrastructure of which 50 per cent will be invested in transport infrastructure.

During his visit, Prabhu met with International Finance Corporation, the US Transportation secretary Anthony Renard Foxx and also attended a World Bank meeting on transportation.

The minister said that India needs to generate more revenue from non-railways operations, which is currently at a minuscule 2 per cent, as against the global average of 30 per cent to 40 per cent.

Taking that into account, the Indian railway ministry has decided to develop hundreds of stations with all basic infrastructures, rail passengers’ needs. To develop this, huge investment is needed, the minister adds.

Prabhu also said that since the last rail budget in 2015, the ministry of railways has implemented 110 reform measures, fulfilling all the announcements made in the budget.

The minister called American enterprises to take advantage of the transformation that the entire ecosystem is undergoing.

India has opened its rail sector with 100 per cent foreign direct investment allowed in most segments of railway infrastructure such as suburban rail, metro rail, locomotive and rolling stock, manufacturing and maintenance, signalling and electric works and dedicated freight lines, the minister said.

Speaking on this, US-India Business Council (USIBC) president Mukesh Aghi said that our members are buoyed by the range of opportunities that lie in front of them, whether it is adding high speed rails connecting major ports, modernising platforms, improving passenger amenities dedicated freight lines, electrification.

Prabhu also hold a roundtable with USIBC members that include New Silk Route, McLarty Associates, GE, Alcoa, Caterpillar and Microsoft among others.

After the rountable, Parag Saxena, founding general partner and CEO of New Silk Route said that his company welcomed the focus on expanding and modernising the Indian railway through swift financing and private sector involvement.

Appreciating Indian Prime Minister, Narendra Modi’s pro-growth initiatives, Richard Rossow, Director, India and South Asia, McLarty Associates said, India’s railway system is the lifeblood of its economy. I cannot think of a stronger leader to modernize and build out this system.