(FE)
After scaling up railway capex substantially over the last couple of years via extra budgetary resources, the Modi government will begin the process for creating a $5-billion Railways of India Development Fund (RIDF) soon. According to official sources, the railway ministry has floated a Cabinet note for RIDF, which will be considered by the ministers’ council in “the next two to three weeks”. As per the plan, the World Bank-anchored fund will be accessible to all railway projects — public-sector, private ventures and the projects undertaken by their alliance. The idea is that contractors bidding for railway projects will find a cheaper source of funds in RIDF which is in alignment with the long-gestation projects.
“The corpus will not only be available for Indian Railways but also for private operators, say, for station redevelopment,” said a top ministry of railway official, requesting anonymity. The fund was initially planned to be rolled out by the start of the current financial year. However, it is still to get clearance from all ministries. “We are awaiting comments of the law ministry,” said the official quoted above. While the government will contribute 20% of the fund, the rest will be pooled in from the likes of pension funds and sovereign funds. RIDF was announced by railway minister Suresh Prabhu last year in January after his visit to Washington, DC.
