November 21, 2008

RITES and Ircon to get relief on old Iraq projects

Indian government has decided to provide relief to Indian Railways’ public sector units RITES and Ircon International against outstanding dues of INR 133.81 crore for projects executed in Iraq in the 1980s. Centre has also decided to provide the interest rate in cash.

According to an official release, the cabinet committee on economic affairs has given its approval for providing relief against the outstanding dues of RITES and Ircon International for projects executed in Iraq in the 80’s on deferred payment basis.

RITES and Ircon will be paid the balance amounts as per the approved exchange rate of INR 47.86 per dollar. They will be also paid balance amounts of INR 117.75 crore and INR 16.06 crore respectively in cash through additional budget allocation provided by ministry of finance to railway ministry. Moreover, they would both be paid interest in cash at 8.75% per annum, effective from October 2001.

The move comes in the run up to the initial public offer of RITES and as Indian Railways mulls an Ircon IPO.