Washington: The World Bank would be the anchor investor in the new Railway Development Fund, which would be used to fund modernisation of Indian railways, Union Minister Suresh Prabhu has said.
"We have decided to work with the World Bank on creating a Railway Development Fund. This was already initiated. But now, we have taken it forward," Prabhu said here yesterday after his meeting with World Bank officials.
Noting that the World Bank would be anchor investors in this new fund, along with other co-investors, Prabhu said, "This fund would be kick started soon as there is unanimity in the World Bank leadership".
He also said the World Bank leadership has realized that based on the performance in the past one year, Indian Railways is in the "right direction".
However, Prabhu did not divulge the size of the fund, but indicated that it would be the largest ever provided by the World Bank to the Indian Railways.
Prabhu is here to attend a World Bank meeting on transportation. During his stay in the US capital, he also met officials of the International Finance Corporation, the US Transportation Secretary Anthony Renard Foxx, and some of the think-tanks.
The International Finance Corporation (IFC) would look into the possibility of revenue generation through non-railway operation, he said.
"To help us monetization issues, bringing in the global best practices. Globally railways get 30-40 percent of their income from non-railway operations. In India it is not even two percent. 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.
During his meeting with Secretary Foxx, the two leaders decided to create an umbrella agreement with the Department of Transportation about transportation sector in general.
"Today we also agreed to make railway specific umbrella agreement with the Transport Department, which would help to work on many things," Prabhu said.
Prabhu also said, "One of the things we have agreed to work on is to creating a regulatory framework for safety, which is a very important issue for India. We want to enhance the safety of the Indian railways".
In his interaction with a group of investors and infrastructure companies, Prabhu asked them to come and invest in Indian railways.
"The Ministry of Railways has introduced a slew of initiatives, opportunities and reform measures that will allow investors to strive and grow," he said.
"Since the last rail budget in 2015, the Ministry of Railways 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 said.
"With 100 per cent investment allowed in most segments of railway infrastructure such as suburban rail, metro rail, locomotive and rolling stock, manufacturing and maintenance, signalling and electric works and dedicated freight lines, the Ministry of Railways envisages investments worth USD142 billion in the sector that will not only bring about more efficiency in the lifeline of Indian transportation but also
boost manufacturing and fulfil the directive of Make of India," the Rail Minister said.
Meanwhile, USIBC president Mukesh Aghi has lauded Prabhu's effort to overhaul India's rail infrastructure.
"In less than 2 years, Minister Prabhu has undertaken serious efforts to give a facelift to the Indian railways and revolutionize the way Indians travel, transport goods and services and conduct business," Aghi said.
USIBC members are buoyed by the range of opportunities that lie in front of them, he said.
"Whether it is adding high speed rails connecting major ports, modernizing platforms, improving passenger amenities dedicated freight lines, electrification? these are concerted efforts by the government to improve the performance of the railways through substantive restructuring so the sector can contribute to the overall growth of the country," Aghi said.