Finance ministry wants private players out of DMIC funding body

Finance ministry wants private players out of DMIC funding body

Tokyo: The government has proposed to replace private sector players Infrastructure Leasing and Financial Services (IL&FS) and Infrastructure Development Finance Company (IDFC) with state-owned institutions in DMIC Development Corporation (DMICDC), an agency which was set up to raise $4.5 billion to fund the ambitious Delhi-Mumbai Industrial Corridor (DMIC) project.

“The finance ministry has proposed to replace IL&FS and IDFC and bring in government-owned financial institutions in DMICDC. A cabinet note has been moved in this regard," DMICDC chief executive officer Amitabh Kant told reporters on the sidelines of the India-Japan Global Partnership Summit here.

IL&FS and IDFC, according to another official that was here to participate in the meeting, could be replaced by Life Insurance Corporation (LIC) and housing development company HUDCO in the DMICDC.

The equity restructuring, Kant said, is being proposed to avoid any clash of interest between the project participants at a later stage.

IL&FS and IDFC, it may be mentioned, have shown an interest in downstream investments along the Delhi-Mumbai Industrial Corridor, he said.

The government has a 49% stake in the DMIC project, while IL&FS holds 41% and IDFC the remaining 10% participating interest.

Kant further said India is also in talks with the Japanese government to raise another $4.5 billion for the project.

“Together, this $9 billion would be used for funding commercially non-viable infrastructure, like sewerage and drainage in the DMIC," he added.