Funds will be for NWs development and maintenance.

The Inland Waterways Authority of India (IWAI) permission has been revalidated to raise Rs.660 crore through Government of India Bonds for development and maintenance of National Waterways (NWs) in 2017-18.

Funds received through issue of bonds will be used exclusively for capital expenditure to improve infrastructure funding.

The investment to be undertaken for development of

NWs projects identified in 2017-18 is to cost approximately Rs.2,412.50 crore.

Meanwhile, the World Bank has sanctioned a loan of US$375 million for Jal Marg Vikas Project (JMVP) on 12.04.2017.

During 2017-18, out of estimated expenditure of Rs.1,715 crore for JMVP, it is expected that the World Bank would remit a loan amount of Rs.857.50 crore.

Accordingly, the total requirement of funds in 2017-18 is Rs.2,412.50 crore.

During the year 2016-17, IWAI was allocated a sum of Rs.296.60 crore for creation of capital assets which has been reduced to Rs.228 crore in 2017-18. Raising bonds is intended to bridge this gap.

The principal and interest in respect of the bonds worth Rs.660 crore shall be financed by the Government by making suitable budgetary provisions in the Demand of the Ministry of Shipping to meet the bond servicing requirements as and when the need arises.

The interest payment will be on semi-annual basis and the principal on maturity.

The whole exercise would be undertaken by IWAI through appointment of lead managers and coordination with Security Exchange Board of India.

Funds will be released in two tranches keeping the size to get attractive yield from the borrowers.

Borrowing in the last quarter of the year 2017-18, especially during the last two months of the year 2017-18 would be avoided, said a Government announcement on 19 July 2017.

Gross budgetary support from the Government and external financial support for funding development and maintenance of 106 new National Waterways under National Waterway Act, 2016, is grossly inadequate.

There is, therefore, dire need for revalidation of permission to raise balance amount of Rs.660 crore.

In his budget speech, 2016-17, the Hon’ble Finance Minister announced as under:

In accordance with this announcement, IWAI was allowed to issue infrastructure bonds worth Rs.1,000 crore for the first time during 2016-17.

As it was their maiden effort, they could succeed to raise Rs.340 crore on 01.03.2017 through e-bidding for development of inland waterways and shipping infrastructure during 2016-17 at coupon rate of 7.9 per cent. fii-news.com