By Bizodisha Bureau, Bhubaneswar, June 15, 2016 : The Railways Ministry on Tuesday signed an MoU with the Odisha government for a joint venture company to develop rail infrastructure in the state.

The agreement was signed by V. P Dudeja, executive director, [works] on behalf of the  Railways andSanjay Rastogi, principal secretary, commerce and transport department, Odisha government.

The JV Company shall identify projects to be developed and find avenues for financing of the projects.

The proposed joint venture company will be formed with state government holding 51 per cent equity and the rest with the ministry

“The company will primarily identify projects and possible financing avenues in addition to the state and central government. After finances for a project are tied up, project specific Special Purpose Vehicles (SPV) shall be formed. These SPVs can have other stakeholders from public sector undertakings,” said a ministry statement.

“However the joint venture companies shall be mandatory stakeholders with minimum 26 per cent share in the SPVs.”

The ministry of Railways will sign a concession agreement of 30 years with the project SPV for safe and sound operation, revenue sharing and providing technical and marketing logistics to the SPV. The revenue sharing shall be based on already established formula being used for inter zonal apportionment of revenue.

The MoU has clearly vested the land ownership with the SPVs to facilitate the latter to exploit its commercial potential.

“At the end of the concession period, the railways will have option to take over the assets at nominal price,” it added.

By now, seven states – Odisha, Haryana, Maharashtra, Chhattisgarh, Andhra Pradesh, Telangana and Kerala – have signed these MoUs, while 17 states have agreed to this proposal.