The MoU was signed by Mr. Sivasankar for the State and Executive Director, Works, Ved Prakash Dudeja for the Railway Board.

The MoU was signed by Mr. Sivasankar for the State and Executive Director, Works, Ved Prakash Dudeja for the Railway Board.

The government has asked the departments of Law and Finance to vet the shareholders’ agreement for a joint-venture company to be formed by the Railways and the State.

A Memorandum of Understanding (MoU) to set up the company for undertaking project development, financing and implementing identified railway projects in the State on a cost-sharing-basis was signed in Delhi on January 27.

The scrutiny is in the wake of the Railways’ directive to the State to furnish comments, suggestions and modifications, if any, on the shareholders’ agreement by the month-end.

Transport Secretary M. Sivasankar told The Hindu that the copy of the shareholders’ agreement has already been given to the two departments without waiting for a formal letter.

After getting the departments’ report, the Transport Department will submit the State’s version to the Railways. As per the MoU, the State will have 51 per cent equity share and the Railways 49 per cent in the company, which will have an authorised share capital of Rs.200 crore with the initial paid up capital of Rs. 100 crore.

The Transport Department, which also handles railway matters in the State, has also initiated steps as per the “Way Forward’’ provided to the State to set up the company. The State and the Railways have to post a nodal officer each for implementing the MoU.

The Railways have hinted that they prefer a top IAS officer, preferably the Chief Secretary of the State, as the part-time chairman of the company. The Managing Director, a full-time post, has to be selected by a committee comprising representatives of the State and the Railways.

The Articles of Association and the Memorandum of Association need to be formed and filed with the Registrar of Companies to form the company.

“The attempt is to form the special purpose vehicle (SPV) within a month,” Mr. Sivasankar said.

The MoU was signed by Mr. Sivasankar for the State and Executive Director, Works, Ved Prakash Dudeja for the Railway Board.

Commercially viable railway projects will be identified jointly and entrusted to the SPV for execution on a fast-track basis.

Government asks Law and Finance departments to vet the shareholders’ agreement

Source:The Hindu