The Ministry of Railways (MoR) of the Government of India, has launched a scheme for entering into joint venture arrangements with State Governments for the purpose of financing, development and monitoring of projects through such joint ventures companies with such State Governments. The main objects of such joint venture companies shall inter alia include conduct of project surveys, preparation of Detailed Project Reports (DPRs), processing of sanctions, monitoring of projects from time to time and the facilitation of procurement of requisite approvals and clearances for projects.
As per the scheme of the MoR, the State Government should have 51% shareholding whereas MoR should have 49% shareholding in such joint venture company. Project specific special purpose vehicles will be formed wherein such joint venture companies shall have a minimum shareholding of 26%. The ownership of lands over which concession has been granted shall also vest in such project specific special purpose vehicle. Each joint venture company shall have an initial paid – up share capital of Rs. 100 crores, which could be enhanced from time to time upon the approval of the Railway Board and the relevant State Government. Approximately 17 State Governments have consented for the formation of such joint venture companies for the development of railway infrastructure in such states.
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