Coal news and updates

Cabinet nod for Railways JVs with state govts

The Union Cabinet under the Chairmanship of Prime Minister Narendra Modi has given its approval for allowing the Ministry of Railways to form joint venture companies with state governments to mobilise resources for undertaking various rail infrastructure projects within the latter.

The move is expected to benefit the coal and mining sectors as new lines can be developed for evacuation of coal from mines to consumption points, industry sources said.

The joint venture companies would be formed with equity participation of the Ministry of Railways and concerned state governments, an official release said.

Each joint venture (JV) would have an initial paid-up capital of Rs 100 crore based on the quantum of projects to be undertaken. The Ministry of Railways’ initial paid-up capital will be limited to Rs 50 crore for each state.

Further infusion of fund/equity for the purpose of the projects shall be done after approval of the project and its funding at the level of appropriate competent authority.

The JV can also form project-specific SPVs with equity holding by other shareholders like banks, ports, public sector undertakings, mining companies etc.

The joint venture exercise would ensure greater participation of state governments in implementation of railway projects both in terms of financial participation and decision making.

This will also facilitate faster statutory approvals and land acquisition. Besides transporting passengers, various cement, steel, power plants etc would get the necessary rail links for transportation of their raw material and finished products.