The Union Cabinet Wednesday approved a railway ministry proposal to set up joint ventures with state governments for projects. The Railways recently signed MoUs with Kerala and Andhra Pradesh, and with Orissa and Maharashtra last year.
The Cabinet decision will allow the Railways to enter into agreements with other states for last-mile connectivity and station modernisation projects.
As land is a state subject, the Railways hope that partnering with state governments will allow speedy execution of projects. Also, the cash-strapped Railways hopes to pool resources with states.
A senior Railway Board official said the joint venture companies would identify the projects with feasibility studies and sourcing of funds.
Under the proposal cleared by the Cabinet, at a meeting chaired by Prime Minister Narendra Modi, each JV will have an initial paid-up capital of Rs 100 crores, with half of it coming from the state. The joint venture would ensure greater state government participation in implementation of railway projects.
