In an effort to sensitise the banking communities and financial institutions about the opportunities and related challenges offered by the Indian Railways, the Railway Minister Suresh Prabhu drew attention of the bankers to modernise the system by removing bottlenecks and to build capacity.
In a meeting with the top bankers and heads of financial institutions, RBI Governor and Minister of State for Finance Jayant Sinha on Tuesday, Prabhu informed them about the ambitious investment plan of Rs8.5 lakh crore in the coming five years.
During the brainstorming interaction, Prabhu also referred to the MoU with lIC which has assured funds of Rs1,50,000 crore in five years for various railway projects. Prabhu said there is a need for massive investment for strengthening and modernising the key Railway infrastructure in the country.
While Jayant Sinha urged the Railway Ministry for innovation in financing and structuring, the RBI Governor pointed out the long term nature of investments in Railways and the need to create appropriate structures which will withstand political and regulatory risks in the long term.
In his address to the bankers and heads of financial institutions, Jayant Sinha appreciated the Ministry of Railways’ plans for massive investments in the sector and emphasised the need to get the projects going without delay as the economy is poised at the profound moment between fiscal consolidation and fiscal expansion.
“learning from the recent past, financing plans will have to provide for more equity cushion, flexible debt structures and allow for a reasonable coverage of cost overruns. There is a need for developing strong technical and economic skills in Banks and FIs for project evaluation and monitoring,” Raghuraman said.
Chairman, Railway Board, Financial Commissioner and senior officers of the Railway Board, the heads of Railway PSUs also unveiled their investment plans at the meeting organised by organised by the Railway Ministry and Indian Railway Finance Corporation.