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World Bank, railways to collaborate for pension funds: Suresh Prabhu

Livemint:  March 23, 2016

New Delhi: The Indian Railways is in talks with the World Bank (WB) to create a new fund, in which both would be core investors and approach different financial institutions for long-term investments.

Speaking at the CNBC TV18-Mint Infra Interministerial event, railway minister Suresh Prabhu said, “Under this, World Bank would be the core and initial investor and we are also going to invest some money. Then we would together try to access different pension funds and others because such big investors look for profiles which exactly matches Indian Railways as we are a constant revenue stream as well as a long-term revenue stream. So, perennial flow of money would be available for their investments.”

“Money is not a problem for the next two years. We had met financial investors in London and during the roundtable meeting, they clearly said they are willing to fund the idea. Creating such a fund is important as it assures long-term funding,” Prabhu said.

Prabhu said the railways’ debt-to-asset ratio is one of the lowest, compared with China or European countries. “The railways has propensity to consume debt of a much larger magnitude,” he said, adding that big investments for railways cannot come from normal revenue streams.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.