The Delhi Mumbai Industrial Corridor get an injection of equity
By UK India Business Council (UKIBC)
The Cabinet has recently approved the restructuring and refinancing of the Delhi Mumbai Industrial Corridor Development Corporation (DMICDC). This is good news for this ambitious project, which has a financing and technical partnership with the Government of Japan.
The DMIC, which is still in the planning stage, includes a 1,843 Km dedicated rail and freight corridor across six states: Uttar Pradesh, the National Capital Region (NCR) of Delhi, Haryana, Rajasthan, Gujarat and Maharashtra linking Dadri in NCR with Jawarharlal Nehru port in Mumbai. The project also envisages the creation of 7 new industrial cities along the route.
The government recently approved an equity investment of INR 18,500 Crore (£2.6 billion), to be matched by an equal amount from the Government of Japan, according to a senior official closely involved in the project as reported in The Economic Times on 16th September.
This fund will be used to finance initial infrastructure such as sewage and roads.
The Cabinet also approved a change in the shareholding structure and it will buy back the 51% shareholding in the DMICDC, jointly held by private sector companies IL&FS (41%) and IDFC (10%). The Ministry of Finance has yet to announce which government or state infrastructure companies will buy the stake.
The restructuring has been undertaken now to avoid any conflicts of interest when individual projects under Phase 1 are bid.
DMIC presents a major opportunity for UK companies given our global reputation as a world class developer of infrastructure. Indeed, UK companies are already involved, such as Halcrow as consultants on the Gujarat and Uttar Pradesh Investment Regions, and Scott Wilson has been appointed as consultant for the overall planning of DMIC region.
