Indian Railways is going to sign within a fortnight memoranda of understanding (MoUs) with some multilateral and financial institutions for funds to augment its existing capacity, railway minister Suresh Prabhu said on Sunday.
Prabhu had, in his maiden rail budget, announced the ministry’s plans to attract investments worth Rs 17,000 crore during 2015-16 from various public sector undertakings (PSU), multilateral and financial institutions.
“There is a very large amount of money which is committed for railways. We will sign MoUs in 10-15 days”, the minister said.
The ministry is already in talks with Coal India (CIL) to set up special purpose vehicles (SPV) for each state.
Railways has planned to invest Rs 1,00,011 crore next financial year. Out of this, it will get some Rs 40,000 crore in the form of gross budgetary support from the finance ministry and will borrow Rs 17,655 crore from the market.
Apart from institutional investments, it hopes to receive Rs 5,781 crore through the PPP mode, and the rest Rs 17,793 crore from internal accruals.
According to the minister, the monetisation of railways’ land assets will be a major source of funds in near future.
Addressing the concern of various stakeholders about whether the cash-starved railways is planning to sell its assets to generate funds, Prabhu said, “We are not going to sell our lands. There are various other ways to get money out of it. Monetising the assets does not necessarily mean selling.”
“You sell lands to get money but if we can do it without selling, then why do we need to sell? We may require it later for our own needs”, he added.