New Delhi, Dec 30 (IANS): The cabinet on Wednesday approved the formation of joint venture companies with state governments to undertake various railway infrastructure projects.

"This would ensure greater participation of state governments in implementation of railway projects both in terms of financial participation as well as decision making process," a satement issued after a cabinet meeting said.

The railway ministry's initial paid up capital will be restricted to Rs.50 crore for each state.

"Each Joint Venture would have an initial paid up capital of Rs.100 crore based on the quantum of projects to be undertaken. Further infusion of fund/equity for the purpose of the projects shall be done after approval of the project and its funding at the level of appropriate competent authority," the statement said.

Project specific Special Purpose Vehicles (SPV) can also be formed by the joint ventures with equity holding by other stakeholders like banks, ports, public sector undertakings, mining companies and others.