Cabinet allows Inland Waterways Authority to again raise funding through bonds

New Delhi, July 19 (IANS) The Union Cabinet on Wednesday allowed Inland Waterways Authority of India (IWAI) to issue bonds again in 2017-18 to raise Extra Budgetary Resource of Rs 660 crore for development and maintenance of National Waterways.

An official release said that the proceeds will be utilised by IWAI exclusively for capital expenditure to improve infrastructure funding.

The release said that investment to be undertaken for development of identified projects in 2017-18 is estimated to be about Rs 2,412.5 crore, and the government will finance principal and interest in respect of the EBRs worth Rs 660 crore.

Interest will be paid semi-annually and the principal on maturity.

The whole exercise would be undertaken by IWAI through appointment of lead managers and coordination with market regulator Sebi. The release said funds will be released in two tranches to get attractive yield from the borrowers.

Noting government's gross budgetary support and external financial support for funding development and maintenance of 106 new national waterways is quite inadequate, the statement said: "There is, therefore, dire need for revalidation of permission to raise EBRs of balance amount of Rs 660 crore."

In his budget speech for 2016-17, Finance Minister Arun Jaitley had said that to augment infrastructure funding further, government will permit mobilization of additional finances to the extent of Rs 31,300 crore by NHAI, RFC, REG, IREDA, NABARD and IWAI through raising bonds during 2016-17.

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 March 1, 2017 through e-bidding for development of inland waterways and shipping infrastructure during 2016-17 at coupon rate of 7.9 per cent," the release added.