DMICDC to be 'deemed company'; IL&FS,IDFC to exit

NEW DELHI: IL&FS and IDFC will completely exit from the DMIC Development Corporation, transferring their combined 51 per cent stake in favour of the government-owned financial firms, according to Industry Ministry sources.

The DMICDC will now be treated as a 'deemed company' as the majority shareholding would now be with the government and state-owned financial and infrastructure institutions.

Such companies are subject to audit by Comptroller and Auditor General (CAG).

DMIC Development Corporation (DMICDC) is a special purpose vehicle for implementing the ambitious USD 90 billion project for building industrial enclaves along the Delhi- Mumbai rail corridor, encompassing seven states - Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.

The project which envisages creation of not only industrial townships but also new cities, is being supported by Japan.

While the Union Cabinet cleared the equity DMICDC restructuring on September 15, details were not announced.

According to a senior official in the Department of Industrial Policy and Promotion (DIPP), which conceptualised the project, "They (private sector players) will quit. Now DMICDC would become a deemed company".

When contacted, Infrastructure Development Finance Company Limited (IDFC) said,"We don't have any formal proposal from the Government of India till date. Hence, we cannot give you any response as of now." IL&FS could not be reached despite repeated attempts.

Government-owned financial institutions, like LIC and HUDCO may buy stake in the corporation.

"The Finance Ministry would decide about the public financial institutions," the DIPP official said.

Presently, government has a 49 per cent stake in the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC), while 51 per cent is jointly held by IL&FS and IDFC.

The equity restructuring has been done to avoid any clash of interest between the project participants at a later stage, he said.

The DMICDC is setting up an industrial corridor along the Delhi-Mumbai rail corridor at an estimated cost of USD 90 billion.

Source: Economic Times