Govt to pay Rs 117.75 cr to RITES for Iraq project

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New Delhi, Apr 8 (UNI) The Centre has approved a payment of Rs 117.75 crore, to RITES, a Mini Ratna public sector enterprise of the Railway Ministry, for executing a rail project in Iraq on deferred payment basis.

The payment, along with interest from October 2001, is to be made in cash in 2008-2009 through additional budget allocation provided by the Finance Ministry to the Ministry of Railways for outstanding payments against the project.

RITES Ltd. executed an operation and maintenance (O&M) project in Iraq during 1988-90. Payments under the project were held up due to imposition of UN sanctions on Iraq, which resulted in restriction in remittance of funds outside Iraq.

To mitigate the financial problems of the Indian exporters arising due to sanctions on Iraq, the Indian Government decided to provide relief to the exporters in 2001 by making payment and issuance of bonds.

RITES could get only part payment in 2003 against the approval.

''Now the balance payment of Rs 117.75 crore, intended to be made in 2008-2009, has been approved recently by the Government of India,'' a RITES official said.

RITES Ltd. has also decided to make an Initial Public Offer (IPO) of 140,00,000 equity shares of Rs. 10 each and filed a Draft Red Herring Prospectus (DRHP) with SEBI. Kotak Mahindra Capital Company Limited, Enam Securities Private Limited and ICICI Securities Limited are to be its lead managers.

The equity shares are proposed to be listed on the National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd. (BSE).

The proceeds of the IPO are proposed to be used, among other things, for financing leasing of rolling stock and investment in BOT and BOOT projects in the infrastructure sector.

At present, RITES is involved in the rehabilitation, operation and maintenance of the railway network in Tanzania and Mozambique where it is engaged the for 25 years. The company has 51 per cent and 26 per cent stakes in these projects respectively.


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