A $5 billion fund for various infrastructure projects of the Indian railways will soon become a reality. The proposed Railways of India Development Fund (RIDF) will be placed before the Cabinet for its approval in the coming days, Railway Minister Suresh Prabhu announced on Saturday.
"There were certain hurdles that were to be cleared for the proposed $5 billion Railways of India Development Fund before seeking Cabinet approval. We are almost done with the structuring of the fund and hope we will be able to take it to the Cabinet soon," Prabhu told the Indian Express.
A senior Railway board employee said that nearly 20 percent of the fund would come from the finance ministry. The remaining funds, which will be anchored by the World Bank for a period of seven years, will come from pension funds and sovereign funds, Namita Mehrotra, Executive Director of the Railway Board said.
"It is being planned that the World Bank will route the funds through the finance ministry, which will be invested in RIDF as equity. We are hopeful of receiving a good response from pension funds and sovereign wealth funds," Mehrotra was quoted as saying by the publication.
The railways have laid down a plan to refurbish about 407 stations across the country. The first stations, which will be re-developed are Habibganj (Bhopal), Surat, Anand Vihar and Bijwasan station in New Delhi, the Hindu reported.
"It is estimated that the average cost of redevelopment of a station will range between Rs. 100 crore to Rs. 400 crore. This money can be raised privately. If properly designed, these 400-odd stations alone could generate sizable resources. More importantly, the multiplier effect of redeveloping stations across the country could unleash thousands of business opportunities for small and medium enterprises and jobs for our youth," HDFC chairman Deepak Parekh told the Indian Express.
Earlier this year, the railway had predicted an expenditure of Rs. 1 lakh crore towards station re-development and logistics parks.