Indian Railway Finance Corporation (IRFC) is in discussion with the National High Speed Rail Corporation Ltd (NHSRCL) to finance the extended section of the Ahmedabad-Mumbai High-Speed Rail Project.

The 508km link will be India’s maiden high-speed rail project, which is expected to lead the bullet train services in other parts of the country.

Estimated to cost $17.15bn, the project is being executed by Rail Vikas Nigam and the NHSRCL.

IRFC chairman and managing director Amitabh Banerjee was quoted by The Hindu Business Line as saying: “The NHSRCL has already approached IRFC for further financing of the project or some financing for future projects. We are open to finance them for extended projects. They are already in talks with IRFC for financing because of least cost funding.”

To further expand its funding horizon, IRFC will now look for private companies having an operational association with Indian Railways.

Banerjee continued: “As such, our memorandum of articles permit us to finance to any sector, which has forward or backward linkage with Indian Railways, including ports and logistics for connectivity. We can fund the logistics sector if it helps to augment the freight carrying capacity of Indian railways. We are open to funding them.”

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Moreover, privatisation of certain portions of the railways, including operation of high-speed trains on certain routes, is also being considered.

Banerjee added: “With an investment of about $4bn, private players will procure their own rolling stock and run on these routes. So some of these have also approached us for financing the rolling stock because of the low-cost funding we provide.”

For IRFC, the Indian Government has remained the largest client, and that will remain so at least for the next 8-10 years because of the execution of the National Rail Plan, under which the government aims to spend $137bn to augment rail capacities and improve the infrastructure around it.

Banerjee concluded: “But in certain sectors, depending on the viability of the projects, we may look to fund private projects. But we have to be careful in lending to the private sector as we have not had any NPA so far. These projects will have to be very well protected and ring-fenced.”

In September 2020, the NHSRCL opened technical bids for the construction of a section of the Mumbai-Ahmedabad High-Speed Rail corridor.

A total of three bidders involving two consortiums and Larsen & Toubro expressed interest in the high-speed project.

The technical bids were for the design and construction of a 237km section of the corridor, as well as four stations.