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ABOUT G-Ride

Railways have an important responsibility to provide linkages to the upcoming centers of growth and in Rail Budget 2016, importance was given on Creation of Joint Ventures with State Governments for undertaking rail based projects. Considering the fact the state government has given the green signal in forming a new company, named 'Gujarat Rail Infrastructure Development Ltd (G-RIDE)' to develop rail infrastructure in the state. The state government's stake will be 51% while that of Indian Railways will be 49%. This company will work on projects to improve connectivity and correct missing links in the state.

The state government will take care that it gets project permission from the authorities and also performs land acquisition. The JV Company will co-ordinate with the Railway ministry through an SPV and implement works for the concerned zonal railways and Railway PSU projects. It has been decided that the contract of the specific SPV could be for 30 years under Railways, and land would be under the ownership of the project SPV. The proposed joint venture's initially paid up capital will be Rs. 100 crore, which is based on the cost of projects to be undertaken. Authorized share capital and paid up share capital of this JV firm, can be hiked from time to time.

SPV STRUCTURE OF G-RIDE

FUNCTIONAL STRUCTURE OF SPV

The proposed rail connectivity infrastructure projects envisaged in Gujarat are anticipated to involve a significant quantum of investment and at the same time have a long gestation.
The rail connectivity projects and development of the region/location being connected itself are mutually dependent on each other and hence would require public sector oversight and intervention for facilitating development and funding especially in the early stages.
There are challenges in attracting a private sector developer at an early stage, while at the same time these projects being entirely public funded result in significant public resources being tied up.
To overcome the above challenges, the approach adopted for G-RIDE (Holding SPV) formation is to pool in public resources of various arms and agencies of the State and Union Government as also to structure projects (Independent SPVs) with the relevant partners/stakeholders in a manner that they are more bankable.
Independent SPVs (Subsidiaries) shall be created for each rail connectivity project. G-RIDE (Holding SPV) will have constituents common to all rail connectivity projects, with a minimum 26% stake in each of these independent SPVs.
The Independent SPVs (Subsidiaries) will have equity participation from partners specific to a particular connectivity project (such as port developer, contractors, industrial hubs or industries seeking connectivity etc.)
The umbrella SPV structure helps in leveraging funding from the public and private sectors. Funds can be raised by G-RIDE from multilateral agencies in terms of soft loan. The Independent SPVs (Subsidiaries) can in turn raise debt from banks and financial institutions.

The state government will take care that it gets project permission from the authorities and also performs land acquisition.

Contact Us

  Block No. 6, 7th Floor, Udyog Bhavan, Sector – 11, Gandhinagar, Gujarat, India.
     
  +91-79-232-32728/29
     
  +91-79-23222481