The World Bank and the Indian Railways will work together to create a Railway Development Fund that will partly finance the $142 billion investment plans for the core infrastructure sector announced by the government headed by Prime Minister Narendra Modi.
“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 World Bank.
He 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 the U.S. Transportation Secretary Anthony Renard Foxx.
“This fund would be kick started soon as there is unanimity in the World Bank leadership,” the minister said.
IFC to help railways
He said the IFC could help Indian Railways to monetize its huge assets. “Globally railways get 30-40 per cent of their income from non-railway operations. In India it is not even two per cent,” the minister said.
Putting the huge 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. USIBC President Mukesh Aghi said the new direction of the Indian Railways has enthused U.S. companies.
“In less than two 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.