The Indian Railways will this week firm up two Memorandums of Understanding providing for investments to the tune of Rs 30,000-crore, in pursuit of railway minister Suresh Prabhu’s plan to raise resources through extra budgetary resources (EBR) to ramp up the public transporter’s creaking infrastructure.
One of these agreements will be signed between the Railways and the state-run Life Insurance Corporation (LIC) of India.
The Railways wants LIC to park its `1 trillion worth surplus funds to develop its infrastructure over the next five years.
“The response to Prabhu’s idea of raising resources from ‘outside the Railway budget’ has been phenomenal… Japan has offered to park 4% of its pension funds for infrastructure development in the Indian Railways and an agreement is likely to be finalised next month,” highly placed sources told HT.
A joint statement signed in the presence of Japan Prime Minister Shinzo Abe and Indian premier Narendra Modi on September 1 last year — during the latter’s visit to Tokyo — enlists Japan’s offer of financial assistance worth 50 billion yen ($500 million) for infrastructure development in India.
While outlining the biggest-ever plan outlay of Rs 1,00,011 crore for 2015-16, the Railways minister presented an ambitious target of raising Rs 17,655 crore by way of market borrowings under EBR.
“Plans to raise resources through EBR are very much on course. These funds will be utilised for decongesting the High Density Networks (HDNs) of the Indian Railways… Next year, we should be in a position to double the plan size,” minister of state for railways Manoj Sinha told HT.