Railway budget 2016: Ahead of the Rail Budget, the government has taken a step forward in making bullet train a reality in India by creating a new company called the National High Speed Corporation Limited.
Formed as a joint venture company between the Ministry of Railways and states of Gujarat and Maharashtra, the company has a paid-up capital of Rs 20,000 crore — basically taking into account the future amount that it will invest into the 500-km Mumbai-Ahmedabad bullet train corridor. The remaining money, 81 per cent of the project cost, is being funded by Japan.
In the Rail Budget, railway minister Suresh Prabhu will infuse around Rs 200 crore for the first year of its operations as the newly formed entity takes baby steps, sources said. At present, the company has been formed with two temporary directors who are officials of the Railway Board.
Subsequently, during 2016, the company will finalise a building in Delhi for headquarters and induct a full-time management starting with a managing director to be selected by a search committee headed by the Cabinet Secretary. As per the Cabinet approval, the company, a first in the country, serves as a template for spearheading high-speed projects across India. As per plans of the government, the National High Speed Rail Corporation can enter into similar joint venture arrangements like other state governments to build other high speed projects, like the Delhi Metro Rail Corporation does in the case of metro projects.
The total project cost of the Mumbai-Ahmedabad corridor being around Rs 98,000 crore, India will have to invest around Rs 18,000 crore to meet its part of the deal. This money will be invested through this company which will be the implementing agency of the project.
In a recent meeting of state chief secretaries and Railways, chaired by Arvind Panagariya, it was highlighted that the company should start work as soon as possible and states have been advised to expedite the process along with getting the required funding as capital infusion into the newly created joint venture.