The much-delayed Delhi-Mumbai Industrial Corridor (DMIC) project is set to take off soon with the finance ministry close to resolving regulatory and financing issues with Japan Bank of International Cooperation (JBIC), the lending arm of the Japanese government. Sources said a meeting is scheduled between the two on February 28, where all issues, including the promoter stake in the company, will be addressed so that work on the project could be started without further delay.
A government official requesting anonymity said the finance ministry will deliberate with officials from JBIC to work out the terms and conditions of the loan to be given to DMIC.
The ministry is keen on initiating the ambitious project as it will give a major push to infrastructure projects in the country.
DMIC was incorporated in January 2008 with an authorised equity base of R10 crore. The government held a 49% stake in the special purpose vehicle (SPV), IL&FS holds 41% and IDFC has 10% stake.
During the visit of Japanese PM Yoshihiko Noda to India in the last week of December, the Japanese delegation headed by Noda had announced a $4.5 billion contribution for projects with Japanese participation, through financing from JBIC and official development assistance from Japan International Cooperation Agency to the DMIC facility.
Sources also indicate that finance ministry is keen to rope in LIC and IIFCL to buy stakes in DMIC from IL&FS and IDFC asw they want to retain PSU charected for the entitry.
DMIC which proposes to develop self-sustainable cities on either side of the 1,483km-long western dedicated rail freight corridor between Dadri in Uttar Pradesh and Jawaharlal Nehru Port Trust in Navi Mumbai, will operate through the DMIC apex authority will be chaired by finance minister Pranab Mukherjee and the state-level authorities by the respective chief ministers.
Under the apex body, a DMIC fund will be set up as a trust. It will be chaired by the secretary of the department of conomic affairs in the finance ministry and will comprise the DIPP secretary and financial adviser and representatives
of the department of expenditure, Planning Commission and the chief executive of of DMICDC, who will also be the chief executive officer of the trust.
The fund will contribute debt and equity to the SPVs on a case-to-case basis, after investment proposals submitted by DMICDC are approved by the board of trustees. The government grant will be revolving in nature to enable the development of more cities.
The cabinet in September last year had approved R 7,500 crore of financial assistance over five years for providing assistance through debt or equity to the SPVs and for the development of trunk infrastructure in the industrial cities along the DMIC.
DMIC will run across six states ? Uttar Pradesh, Haryana, Madhya Pradesh, Rajasthan, Gujarat and Maharashtra ? and a majority of the projects in the corridor are envisaged to be implemented through public-private partnerships.
It is touted to be the largest infrastructure project in the world, with an estimated $90-100 billion required only to set up the infrastructure over the next 30 years.
