Millennium Post

IR to borrow 47% more to fund FY16 capex

The market borrowing as per the revised estimate by these two companies during the current fiscal was pegged at Rs 12,045 crore from markets, according to the Railway Budget for 2015-16, which was tabled by Railway Minister Suresh Prabhu in Parliament on Thursday.

Indian Railways Finance Corporation (IRFC) will raise Rs 17,276 crore in 2015-16 for investment in rolling stock, the Railway Budget document said.

Besides, the other financial firm under Indian Railway Rail Vikas Nigam Ltd (RVNL) plans to raise Rs 379 crore through market borrowing. During 2014-15, IRFC raised Rs 11,772.60 crore while RVNL mopped up Rs 273 crore from the market as per the revised estimate.

“For financing remunerative projects through market borrowings, it is intended to tap low-cost long-term funds from insurance and pension funds, multi-lateral and bilateral agencies which can be serviced through incremental revenues,” Prabhu said in his proposals while presenting the Rail Budget.

Railways will create new vehicles to crowd in investment from long-term institutional investors and other partners, he said. “These may include setting up an infrastructure fund, a holding company and a JV with an existing NBFC of a PSU with IRFC, for raising long-term debt from domestic as well as overseas sources, including multilateral and bilateral financial institutions that have expressed keen interest in working closely with Railways in this endeavour,” he said. Resources from Public Private Partnerships (PPPs) have been pegged at Rs 17,136 crore.

Eyes 14% freight revenue growth to Rs1.21 trillion

The proposed hike in freight rate will help Railways’ earnings from movement of goods grow by 14 per cent to Rs 1,21,423 crore in the next financial year, nearly half of which is expected to come from coal and cement.

In 2014-15 (revised estimate), the revenue from movement of goods will rise to Rs 1,06,927 crore from Rs 93,095 crore in the previous year, according to the Rail Budget document. Out of the total revenue projected for the next fiscal, revenue from movement of coal would contribute the maximum at Rs 50,398.59 crore, up from Rs 44,486.27 crore in the current fiscal.

The earnings from movement of cement is projected to increase to Rs 10,813.56 crore in 2015-16 from Rs 9,668.42 crore.

Whereas, movement of foodgrains is expected to rake in Rs 10,158.58 crore in next fiscal from Rs 9,088.9 crore at present.

Budget proposals, presented by Railway Minister Suresh Prabhu in the Parliament today, proposed a hike i freight rates for 12 commodities in the range of 0.8 per cent to 10 per cent.

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