Inland Waterways Authority of India (IWAI), the implementing agency for Centre’s Jal Marg Vikas Project, will issue infrastructure bonds by the second week of October to raise Rs 660 crore for meeting capex needs.
“We will raise bonds worth Rs 660 crore in the first or second week of October. We had already raised Rs 340 crore from an approval of Rs 1,000 crore last fiscal,” IWAI Vice-Chairman Pravir Pandey told PTI.
Last year, for the first time, the company was allowed to issue infrastructure bonds worth Rs 1,000 crore. Of this, it had raised only Rs 340 crore due to lower fund requirement.
The Cabinet has approved the revalidation of permission to raise extra budgetary resource (EBRs) of Rs 660 crore as Government of India Bonds by IWAI in 2017-18.
“It will be a 10-year government guranteed paper but will not be a tax-free issue,” IWAI member finance Alok Ranjan said.
Proceeds from the bonds will be utilised for development and maintainence of national waterways. The funds will be used exclusively for capital expenditure to improve infrastructure funding.
Pandey said, once the 2.5 per cent of the proceeds of central road fund (CRF) begins flowing in, it would not require any further public issue to raise fund for implementation of projects.
The Union Cabinet in May this year had approved the amendment of Central Road Fund Act, 2000, to allocate 2.5 per cent of the proceeds of CRF for development and maintenance of national waterways and a reduction in the share provided for the development of national highways.
An allocation of 2.5 per cent of CRF proceeds would provide approximately Rs 2,000 crore per annum. The World Bank had sanctioned a loan of $375 million for Jal Marg Vikas Project (JMVP) in April 2017.
During 2017-18, out of an estimated expenditure of Rs 1,715 crore for JMVP, the World Bank is likely to remit a loan amount of Rs 857.50 crore. Accordingly, the total requirement of funds in 2017-18 is Rs 2,412.50 crore and the bond will bridge the funding gap for the year.