- Japan, India to conduct joint research on rail, minister Says
- India plans to have dedicated freight corridor in 3 1/2 years
India proposed Japanese pension funds invest in rail projects in the South Asian nation as the government prepares to spend more than $140 billion over five years upgrading its outdated tracks.
Indian Railways Minister Suresh Prabhu said he proposed the investment by Japan’s pension funds during a series of meetings with Prime Minister Shinzo Abe and other ministers recently. The two sides also discussed doing joint research and development on railways, Prabhu said at a speech during a conference on India-Japan economic relations in New Delhi Tuesday, without giving more specific details.
“Any pension funds will first desire security because capital is very important,” Prabhu said. “Railways has a great advantage because they are very safe to invest, because railways are owned by the government of India, so therefore capital is not only guaranteed, but interest on that is also very grand.”
Prabhu didn’t identify any fund by name. Japan’s Government Pension Investment Fund won’t comment on individual discussions, Shinichirou Mori, a Tokyo-based spokesman for the pension fund, the world’s largest, said by telephone Tuesday. The fund is currently invested in completed infrastructure projects that are delivering returns, he said.
The proposal is part of India’s efforts to find investors for an ambitious modernization plan for Asia’s oldest rail network, after decades of under-investment have resulted in tracks being congested and trains not running on time. State-owned Indian Railways plans to double investments next fiscal year and spend a total of $142 billion over five years.
India plans to issue a railway rupee bond on London’s stock market, Indian Prime Minister Narendra Modi said last week during a joint press briefing with U.K. Prime Minister David Cameron. That came days after General Electric Co. said it won a $2.6 billion contract over 11 years to build and maintain diesel locomotives for India’s state-owned railway, and Alstom SA won a contract worth about $3 billion to make electric engines.
Prabhu also said a $15 billion freight corridor -- a network of tracks -- dedicated for transporting goods is targeted for completion in three-and-a-half years.
Indian Railways can contribute 2.5 percent to 3 percent of gross domestic product after investments, without specifying a time frame, he said.