Indian Railways
The headquarters of the joint venture will be located at Raipur city or Naya Raipur. Picture: Indian RailwaysReuters

Union Railway Minister Suresh Prabhu on Saturday said that the World Bank will work with the Indian Railways to set up a railways development fund that would finance a part of $142 billion project to modernise the railways.

The railway minister did not divulge details on the size and nature of the fund, adding that it was "still under discussion," The Hindu reported.

"Our idea is to get part of this plan funded by multicultural bodies and the World Bank that have global experience and access to technology. This fund would be kickstarted soon as there is unanimity in the World Bank leadership," Prabhu said after a meeting with senior World Bank officials.

The railway minister was in Washington on a two-day visit and had met officials of the IFC (International Finance Cooperation) , US transport officials and also attended a World Bank meeting on transportation.

The IFC is keen to monetise the assets of the Indian Railways, the report stated.

"Globally, railways get 30-40% of their income from non-railway operations. In India it is not even 2%. So this is going to be challenging time particularly when Indian railways would have to bear the additional burden of the pay commission," he said.

Prabhu is also believed to have interacted with many infrastructure companies and investors, asking them to invest in Indian Railway, Business Today said.

"The Ministry of Railways has introduced a slew of initiatives, opportunities and reform measures that will allow investors to strive and grow. Since the last rail budget in 2015, the ministry has implemented 110 reform measures, fulfilling all the announcements made in the budget. We encourage American enterprises to take advantage of the transformation that the entire ecosystem is undergoing," Prabhu added.