PPPs to brace railway infrastructure

 Railway is one of the life lines for most of the Indians. However, the sector is plagued with inadequate infrastructure. According to the Railway ministry, in the last 30 years, as many as 676 projects were sanctioned worth Rs. 1,57,883 crore. Of these, only 317 projects could be completed and 359 projects remain to be completed which will now require as much as Rs. 1,82,000 crore.
Railways Minister D. V. Sadananda Gowda informed, “In the last 10 years, 99 new line projects worth Rs. 60,000 crore were sanctioned out of which only one project is complete till date. In fact, there are 4 projects that are as old as 30 years, but are still not complete for one reason or another.”
With a large backlog of sanctioned projects, funding continues to be the biggest challenge for Indian Railways. While private investment and customer funding for some port connectivity projects and few other power sector projects has started, much more needs to happen if infrastructure creation has to keep pace with the requirement.
Presenting the railway budget, the minister said, “It is our target that the bulk of our future projects will be financed through PPP (public private partnership) mode, including the high-speed rail which requires huge investments.”
He announced, “Railways will interact with industry and take further steps to attract investment under public private partnership (PPP) through BOT and annuity route and 8 to 10 capacity augmentation projects on congested routes will be identified for this purpose.”He assured, “Zonal Railways will be suitably empowered to finalise and execute such projects.”
The announcement on encouraging PPP has placed its hopes on private and foreign direct investments. Welcoming the decision, industry body CII states, “Plans to facilitating connectivity to new and upcoming ports through PPP, speedy work on coal connectivity lines, setting up of logistic parks, among others would push rail services closer to global benchmarks.”
Rana Kapoor, ASSOCHAM President, said, “PPP models will attract a lot of private and overseas investment as the new government enjoys a great amount of credibility to deliver.” He adds, “For the first time perhaps, the Railways Minister’s budget speech read like speech of a Rs. 1,47,000 crore corporate which is wanting to go about servicing its customers.”
“The much-needed support for PPP as a significant source of investment capital is the backbone of providing the strategic financial headspace,” KPMG said.
“The government’s push for PPPs whether in roads or rails will help in mobilising the massive investment that is required for infrastructure development. This will also encourage more and more projects to be developed on PPP model. The Rs. 100 crore set aside for Metro scheme in Ahmedabad and Lucknow is a good decision in this regard,” observed AM Muralidharan – President, Volvo Construction Equipment.
Indian Railways has taken up port connectivity on priority through PPP mode of funding in tandem with Sagar Mala Project of port development. “Railways will facilitate connectivity to the new and upcoming ports through private participation,” Mr Gowda announced. He said, “So far in principle approval has been granted for building rail connectivity to the Ports of Jaigarh, Dighi, Rewas, Hazira, Tuna, Dholera and Astranga under Participative Model Policy of Indian Railways, amounting to a total of over Rs. 4,000 crore.”
———-“It is our target that the bulk of our future projects will be financed through PPP (public private partnership) mode, including the high-speed rail which requires huge investments”
DV Sadananda GowdaRailways Minister

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