Ministry to seek private investment for world-class stations, auto hubs and high-speed passenger train corridors.
As expected, Railway Minister Mamata Banerjee has sought private sector capital in various areas of operation while clarifying that this does not tantamount to privatisation.
“I would like to assure my railway family (comprising 1.4 million employees) that we are not going for privatisation of the railways. I do not believe in privatisation or corporatisation. Railways will continue to be a government department,” she said in her Budget speech which had over a dozen mentions of public-private partnership, or PPP.
The ministry will seek domestic investment though the PPP mode for a range of activities like building world-class stations, auto hubs, manufacturing units of rolling stock, multi-modal logistic parks, high speed passenger train corridors, port connectivity and laying new lines.
There was no estimate of the private sector investment sought, though industry officials estimate the opportunity to be worth thousands of crores of rupees.
“Domestic investors have tremendous scope in railways and that will be our hope in the future. It will facilitate a large quantum of investment and provide ready business to investors. Therefore, it will be a win-win option for all,” said Banerjee in her speech which was decidedly business-friendly.
Since the railways have not been very successful in attracting private investment so far, she promised to facilitate and expedite private sector investment through a special task force, which would clear investment proposals within 100 days.
“In creating infrastructure with private capital, we will create wealth for all,” she said, adding that the policy guidelines would be made easy and investment-friendly.
A few multi-level parking complexes are proposed to be taken up as pilot projects under the PPP route during the current year.
Banerjee has also proposed to start — using the PPP route — six bottling plants at Ambala, Amethi, Mal, Nasik, Farakka and Thiruvananthapuram, to provide fresh water to travellers at rates lower than the Rs 12-13 per bottle charged by the leading players.
This apart, the minister plans to set up a rail axle factory at New Jalpaiguri in West Bengal through the PPP mode to achieve self-sufficiency in axle manufacturing.
To augment the capacity of wagon production, she proposed five state-of-the-art wagon factories in joint venture or PPP mode at Secunderabad, Barddhaman, Bhubaneswar/Kalahandi, Guwahati and Haldia.
Given the plethora of demands from various state governments, Banerjee said “railways will consider on priority new proposals from state governments for construction of rail infrastructure in their states if they agree to funding on PPP basis.”
The six proposed high-speed passenger rail corridors — which will allow trains to run at 250 to 350 km per hour — will also be executed through the PPP mode.
A refrigerated container factory would be set up in the PPP mode at Budge Budge near Kolkata to help the movement of perishable farm produce, Banerjee added.
The railways’ optic fibre network is also proposed to be extended — to the last mile — through the PPP mode.
Experts, however, maintain a guarded approach to Banerjee’s ambitious plans to attract private investment.
“We are talking about investments running into thousands of crores. Some definitive timelines, rather than statements of intent, would have better indicated her seriousness to attract private investment,” said Amrit Pandurangi, leader-infrastructure practice, PricewaterhouseCoopers.
