The Odisha Government has agreed on formation of a Special Project Vehicle (SPV) or a Joint Venture (JV) to take up railway projects in the State with the Ministry of Railways. This JV will take up new and already ongoing projects in the State.
The proposed JV will have an authorized share capital of Rs 200 crore and the State Government will have 51 per cent share in it while the Ministry of Railways will have 49 per cent of share.
As the State Government will have major share in the proposed JV, chairman of the board will be from the Odisha Government Chief Minister Naveen Patnaik has green-signalled the move, which will facilitate signing of a Memorandum of Understanding (MoU) among the State Government and Ministry of Railways, said a senior official in the Department of Commerce and Transport.
Notably, Union Railways Minister Suresh Prabhu and Chief Minister Naveen Patnaik held discussions during last December in this regard and both agreed for floating JV to expedite the projects, which are lagging due to paucity of funds, said sources.
After both the leaders agreed, there was a series of discussions between the senior officials of the the Ministry of Railways (MoR) and the Odisha Government.
Earlier, the Ministry of Railways wanted the JV to have the share structure of 74 per cent for the State Government and 26 per cent for the MoR. But after deliberations, sharing pattern has been modified, said sources.
With Ministry of Railways agreeing to include ongoing projects under the new JV for which Odisha Government insisted, then road blocks have been cleared to include Khurda Road-Balangir rail project in the proposed JV. Earlier, the Ministry of Railways was not agreeing to include ongoing projects in the proposed JV, said sources.
The Odisha Government has agreed for floating a coal SPV for which the Railways Ministry has agreed.
The State Government is eager to take up infrastructure development of Talcher areas through the proposed coal SPV, said sources.
While the JV will have an authorized capital of Rs 200 crore, initial paid up capital will be Rs100 crore and the State Government will have to contribute its share of Rs 51 crore with immediate effect.
Once the SPV is floated, then new projects and even work from the Balangir side of the Khurda Road –Balangir rail project can be taken up as there will be no problem for funding, said sources.
Notably, the project of western Odisha is of high economic and social importance is lagging for years together due to paucity of funds.
Other major rail projects can be taken up through the JV, said official sources. While the land acquisition will be done by the State Government, project implementation will be done by the Zonal Railways.
The Indian Railways will have the option to take over the assets at the end of the concession period of 30 years.