Urban Transport Act 1998
An Act to provide central government assistance for urban transport projects.
BE it enacted by Parliament of the Republic of India as follows:
1.Definitions
(1) 'City' shall mean any city with a population of greater than 1 million as determined by the Census Bureau in 1991.
(2) 'Board' shall mean the Urban Transport Board.
2.Creation
(1) A body corporate to be known as the Urban Transport Board shall be established.
(2) The board shall consist of:
(a) A Chairperson to be appointed by the President of India.
(b) Four members nominated by the President of India.
(3) Members of the Board shall be appointed for a three year term and shall serve at the pleasure of the President of India.
3.Functions
(1) The Board shall be responsible for central government investment in urban transport infrastructure.
(2) Any person who is a citizen of India or corporate body incorporated in India may submit a project proposal to the board for the construction of urban transport infrastructure in any city.
(a) The application shall include the total cost of the project, a plan for its financing and the benefits that such a project would provide.
(b) The person or corporate body making the proposal shall have obtained prior finance to cover the cost of not less than 25% of the equity.
(c) The state government and the municipal corporation shall together hold at least 15% of the equity.
(d) Proposals may be submitted by persons or corporate bodies currently operating urban transport infrastructure.
(3) The board shall consider the following factors:
(a) cost of the project
(b) viability of the project finance plan
(c) a cost-benefit analysis of the proposal
(d) profitability of the project following completion
(e) the return on capital invested by the board
(e) other issues thought to be relevant by the board
(4) The board may approve a proposal, reject a proposal or ask for it to be resubmitted if the proposal is found to be inadequate but remediable.
(5) The board shall have the power to itself create proposals.
(6) If the proposal is approved by the board, a public limited company shall be registered under the Companies Act to undertake the project which shall be responsible for its construction and maintenance.
(7) The Board may provide equity finance which may not exceed 75% of the total issued share capital of the company.
(8) The Board may provide debt finance for which the interest rate shall be set at not less than 3 percentage points above the cost of borrowing for the Board.
(a) The interest rate shall be set according to the credit worthiness of the borrower.
(b) The Board may provide debt finance to companies in which it does not hold equity.
(9) The Board may acquire equity in urban transport companies that are currently operating urban transport services.
(a) The Provisions of 3.9 may be used only if the company makes a proposal to the board.
4.Powers
(1) The Board may hold, dispose of and otherwise manage shares of companies held by it.
(2) The Government of India's shares in Delhi Metro Rail Corporation Ltd shall be transferred to the Board.
(3) The Minister of Transport may by order in the Official Gazette transfer the undertakings of Indian Railways or any other company or corporation owned entirely by the government of India that fall within the purview of urban transport to public limited companies registered under the Companies Act whose shares may then be vested with the Board. The Minister may make necessary regulations to facilitate such a transfer.
5.Other Provisions
(1) The Board shall provide an annual report to the government of India providing details of project proposals, balance sheets of companies in which it owns stock and the finances of the Board.
(2) The Board shall be funded through internal resources. It shall be responsible for raising money through issuing debt or other instruments. The Minister shall make regulations regarding such borrowing.
(3) The Board shall be liable for debt that it incurs. The government shall gurantee the Board against default on debt.
(4) Income from dividends, interest, profits and the sale of stock shall be retained by the Board.
(5) The Board shall seek to maximise the return on capital.
6.Enactmemt
(1) This bill will come into effect upon receiving Presidential Assent.
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