GUWAHATI: The Assam Rail Infrastructure Development Company (ARIDC), a joint venture public limited company in which the State Government and Ministry of Railways will have stake, is expected to be formally incorporated shortly in what is being seen as an attempt to fast-track railway projects in Assam.
The Assam Government and the Railway Ministry signed an agreement (MOU) in October 2018 to form the Joint Venture company (JV Co), which is intended to identify, develop and implement projects for development of railway infrastructure in Assam.
While the Assam Government will have 51% stake in the JVC, the remaining 49% stake will be with the Ministry of Railways.
“The JVC is expected to help in fast-tracking development of rail transport infrastructure in Assam with active participation of the State Government. Projects like the planned elevated four-track railway corridor from Narengi to Kamakhya in Guwahati and creation of a transport hub at Jogighopa are likely to be undertaken within the scope of the JVC,” told a State Government official at Guwahati.
There will be 10 crore equity shares of the face value of Rs 10 in the company. The State Government will subscribe to 5.1 crore shares at Rs 51 crore and the Ministry of Railways will subscribe to 4.9 crore shares at Rs 49 crore.
“There is need for development of rail infrastructure for critical connectivity and capacity enhancement in Assam. The agreement between the two sides has been concluded with a view to identify, develop and implement such projects that are important for critical connectivity and capacity enhancement,” he said. He said that expansion of railway network to backward and remote areas act as a catalyst for economic and industrial development of the area.
“There are a large number of demands to sanction new projects. Due to limited availability of funds, the Railways is not in a position to take up new projects. Accordingly, a public limited company, which will be a joint venture company, in the name of Assam Rail Infrastructure Development Company (ARIDC), with headquarters at Guwahati, will be formed. It will develop, finance and implement viable railway projects and also projects which require gap funding by itself or through a subsidiary or Special Purpose Vehicle (SPV),” said the official.
The JVC will undertake surveys, prepare detailed project reports (DPRs) to examine viability of the railway projects and process for sanctioning of the project. It will also look after incorporation and funding of subsidiaries and SPVs for undertaking railway projects.
It is noteworthy that the Ministry of Railways has already entered into joint venture agreements with 11 States, including Gujarat, Odisha and Chhattisgarh and there is plan to enter into agreements with more States as well.
“State joint ventures are formed in the spirit of cooperative federalism. The JVC will generate investment through participation or other stakeholders like banks, financial institutions, ports, mining companies, public sector undertakings, industrial bodies and multi-lateral agencies. It will incorporate projects SPVs to implement identified rail projects,” he said.