Indian Railways News

Indian Railways News

Railways to raise Rs 35,000 crore more in FY18

Indian Railways is looking to raise more than Rs 35,000 crore in addition to its budgetary resources in this financial year, primarily to procure safer passenger coaches and electric railway locomotives, and pushing the network electrification and signalling modernisation programme.

All the borrowing will be done through the financial arm of the railways, Indian Railway Finance Corporation (IRFC), according to a senior official, who said the plan includes raising Rs 18,000 crore through the state-run Life Insurance Corporation of India (LIC).

The national transporter plans to construct and operate the projects while the IRFC will own the project assets and lease the assets to the railways, said the official, who did not wish to be identified.

Land for the projects will be licenced to the IRFC for the duration of the lease and the railways will pay the lease charges to the IRFC, enabling the state-run corporation to service the bonds issued to LIC and other subscribers.

“We will raise the money from LIC through IRFC bonds. The money will be spent on line doubling projects.

The IRFC will own those assets and lease them to the railways for a fixed fee. This will be our largest institutional borrowing through LIC,” the official said.

The railways has been permitted to raise Rs 1.5 lakh crore from LIC till 2020 at an interest of 7.5% a year, with a repayment period of 30 years and a moratorium of 10 years.

The IRFC is also looking to list on the BSE international stock exchange as it expects to raise nearly Rs 4,000 crore through dollar denominated bonds from there.

The funds the IRFC raises other than institutional borrowing are spent mostly on rolling stock that includes procuring coaches and locomotives.

For this financial year, Indian Railways has budgeted a capex of Rs 1.31 lakh crore.

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