For the development of Viable Railway Projects including projects with Viability Gap Funding, Government of Gujarat and Ministry of Railways have signed a Joint Venture Agreement on 17th August 2016 to form a JV Company which would develop railway projects by itself or through an SPV’s. Consequently, a JV Company namely Gujarat Rail Infrastructure Development Corporation Limited (G-RIDE) has been incorporated under the provision of the Companies Act, 2013, on 6th January 2017 with equity contribution of 51% and 49% from Government of Gujarat(GOG) and Ministry of Railway(MOR) respectively.

G-RIDE has a mission to develop and augment critical Railway Development projects, enhance capacity of High-Density Network and provide last mile railway connectivity with main railway line of the State with high standards of safety and efficiency by adopting the best technological practices, sound financial strategy and optimum utilization of resources through implementing large capacity creation programs.

• 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.