The Railways on Tuesday received Rs 2,000 crore from the Life Insurance Corporation (LIC), the first tranche of its financial assistance for investment in 50 projects involving construction of new lines and electrification of routes as part of its capacity augmentation programme.
The Railways had signed an MoU with LIC in March this year for financial assistance of Rs 1.5 lakh crore over the next five years for the construction of new lines and route electrification. There is a five-year moratorium on interest and loan repayment.
The Rs 2,000-crore cheque was handed over by LIC to Indian Railway Finance Corporation (IRFC) at a function in the national Capital. The IRFC will issue bonds worth Rs 2,000 crore to LIC as part of the arrangement between railways and the national insurer.
There are several rail projects held up due to the fund crunch. Now, some of these can be taken up with the LIC fund, Railway Minister Suresh Prabhu said. The LIC fund will be utilised for doubling in the 653-km-long Itarsi-Katni-Cheoki section, 273-km-long Billupuram-Dindigul section and the 182-km-long Viramgam-Samakhiyali section.
Besides electrification of the 330-km Chapra-Balia-Allahabad route and 423-km-long Barauni-Katihar route, among the 50 identified rail projects across the country, will be taken up with the
LIC fund.
The Railways have identified the projects to be taken up on priority basis where the internal rate of return is more than 14 per cent. The LIC fund will be invested in the doubling of the 263- km long Vizianagaram-Raigada-Titlagarh-Raipur section, crucial for coal movement in Odisha and Telangana.