ADB extended $150 million loan for Indian Railway System

                        The Government of India and the well known Asian Development Bank (ADB) have signed a pact of US $150 million loan to develop the Indian Railway System. It is mainly the 1^st tranche of Railway Sector Investment Program, which is especially aimed at improving rail freight services and passenger transport routes.

                          This program has loads of positive outlooks. It will help India to improve rail services along some of its busiest freight and passenger transport routes, providing double-track for about 840 kilometers of rail routes and electrifying about 640 kilometers. It will also help to install new signaling system, which is needed to be done as soon as possible to avoid accidents. This is not the end; ADB will also provide its support according reforms to improve operational and financial efficiency at Indian Railways.

                         This program will eventually reduce the consumption of fuels, and it will enhance energy efficiency. It has to be mentioned here that it will help to reduce the pollution, which will eventually enhance the railway safety. It will increase the line capacity, which will be a beneficial factor for the consumers and the producers of goods and services. It will improve staff productivity, and incorporate innovating financing modalities by pursuing carbon credits under UNFCCC.

                         Eventually the total cost of the Railway Sector Investment Program is US $ 1,144.6 million. ADB is assisting this program by sanctioning the loan assistance of US $500 million, which will be provided in four tranches. On the other hand the Government of India is funding the rest of the budget, which is US $644.6 million. This is the 1^st tranche for a total US $ 343.4 million, including ADB’s loan of US $ 150 million and Government’s share of US $ 193.4 million.

                       The pact has been signed by Venu Rajamony, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of finance, on behalf of the Government of India, and Hun Kim, Country Director for India, on behalf of ADB. This historic project was signed by Satish Agnihotri, Managing Director, Rail Vikas Nigam Limited.