The World Bank (WB) and the Indian Railways would work together to create a Railway Development Fund that will partly finance the $142-billion investment plans for the core infrastructure sector that the Narendra Modi government has announced.
“Our idea is to get part of this plan funded by multilateral bodies and the World Bank that has global experience and access to technology is a good partner,”Railway Minister Suresh Prabhu said after a meeting with senior officials of the bank.
Fund size, nature under discussion
The Minister said the size and nature of the fund was still under discussion and a formal announcement would follow soon. Mr. Prabhu said the World Bank was likely to work with global pension funds, among others, to raise money for the new fund.
During his two-day visit to the U.S. capital, the Minister attended a World Bank meeting on transportation, interacted with business leaders at the U.S.–India Business Council (USIBC), met officials of the International Finance Corporation (IFC) and U.S. Transportation Secretary Anthony Renard Foxx.
Fund to be kick-started soon
“This fund would be kick-started soon as there is unanimity in the World Bank leadership,” the Minister said. He said the IFC could help the Indian Railways to monetize its huge assets. “Globally, railways get 30-40% of their income from non-railway operations. In India, it is not even 2%.,”the Minister said. Putting the massive amount of prime real estate held by the Railways into productive use would be the cornerstone of this strategy.
In various interactions, the Minister encouraged U.S businesses to invest in Indian Railways that has been opened up to 100 percent FDI in most part of its operations.
U.S. companies ‘enthused’
USIBC president Mukesh Aghi said the new direction of the Indian Railways has enthused U.S companies.
“In less than 2 years, Minister Prabhu has undertaken serious efforts to give a facelift to the Indian Railways and revolutionise the way Indians travel, transport goods and services and conduct business,”Mr. Aghi said.