Mumbai: To fast-track pending railroad projects in Maharashtra, the state government has sent a proposal to the Union railway ministry for setting up a special purpose vehicle (SPV) to execute these lines.
This SPV route with states, which railway minister Suresh Prabhu is stressing to push railway projects, will make available institutional finance for infrastructure addition without burdening the Centre or the state’s coffers.
The Maharashtra government had agreed to share 50% of the costs of eight proposed and pending rail routes, including the Ahmednagar-Beed-Parli Vaijanath railway. For this, the state cabinet recently approved Rs 1,413 crore.
Last week, prime minister Narendra Modi had reviewed the progress on the Rs 2,826-crore projects, which were pursued by senior BJP leader and former union minister lateGopinath Munde in his lifetime.
“We have sent a proposal to the railway ministry regarding setting up of an SPV. Now, it is for the ministry to respond,” said a senior official from the state transport department. “Forming an SPV will enable us to take up projects faster and on priority,” he said.
The officer stated that this would make projects bankable, which meant that the entity could raise funds from financial institutions and execute works faster.
A debt equity ratio of 30:70 with the state and the railways holding an equal share of equity has been proposed.
SPVs are joint ventures between two or more agencies. An example is the Mumbai Rail Vikas Corporation which was formed in 1999 by the state and the railways to fund rail projects on the Mumbai suburban network under the Mumbai Urban Transport Project.
“Once the SPV is formed and stakeholders like the state and central governments are on board, it will decide on which projects are to be taken up for execution,” the official said.
- Ahmednagar-Beed-Parli Vaijanath
However, the last three are yet to be officially sanctioned.