The railway minister also announced his government’s plan to endorse the previous UPA government’s proposal of bringing FDI, mostly in proposed high-speed rail networks. Photo: Mint
New Delhi: The railway budget has placed its hopes on private and foreign direct investment to create a world-class railway network, even though its emphasis on public-private partnerships (PPP) has raised doubts due to the national transporter’s patchy record on this count.
“It is our target that the bulk of our future projects will be financed through PPP mode, including the high-speed rail which requires huge investments,” railway minister Sadananda Gowda said.
Gowda proposed leveraging financially-sound public sector units (PSUs) owned by railways, such as Container Corp. of India which handles cargo for the railways and RITES Ltd, the consulting arm of railways, by tapping into their investible surplus funds to develop infrastructure projects which can garner attractive returns for the PSUs. The rail PSUs currently have around Rs.4,000-5,000 crore surplus funds.
Vishwas Udgirkar, senior director at Deloitte Touché Tohmatsu India Pvt. Ltd said that even though India has developed one of the largest PPP programmes in the world, the performance of railways in awarding PPP projects has been dismal.
“Railways has approached PPP as a resource generation model, but unless there is a significant shift in its approach towards PPP, it is unlikely that PPP projects will seek much traction. Clear success of some high-profile PPP projects in the railways may lay the groundwork for projects in the future,” he added.
The national transporter also plans to encourage private investment in railway logistics and parcel movement. Gowda said he intends to set up logistics parks to provide warehousing, packaging, labelling, distribution, door-to-door delivery and consignment tracking and sees huge untapped potential in parcel traffic segment through private participation.
At present, most of the parcel business hinders the movement of passengers on platforms. The rail minister has proposed to segregate parcel traffic to separate terminals with storage and handling facilities for customers. “Accordingly, a scheme for private participation in parcel movement will be launched shortly, whereby procurement of parcel vans or parcel rakes by private parties shall be facilitated,” Gowda said.
The railway minister also announced his government’s plan to endorse the previous United Progressive Alliance (UPA) government’s proposal of bringing foreign direct investment (FDI), mostly in proposed high-speed rail networks. The industry department has circulated a cabinet note to allow 100% FDI in railways except in operations and the government has yet to take a final call on the matter.
Internal resource generation in 2013-14 was Rs.11,710 crore against the revised target of Rs.14,496 crore, falling short by Rs.2,786 crore as traffic growth did not meet projections and expenditure rose. Gowda has earmarked Rs.15,350 crore for internal resource generation in 2014-15, which helped him scale down market borrowings through the Indian Railway Finance Corporation to Rs.11,790 crore.
The railways will digitally map its land assets to protect them and for raising resources. “Resource mobilization using land assets will be explored through private participation in setting up railway-related business in railway lands as well as for commercial development,” Gowda said.
Railways will also fast-track better connectivity to coal mines and ports, earning more freight traffic and additional revenue. Gowda said he would speed up construction of critical coal connectivity lines in Tori-Shivpur-Kathautia area, Jharsuguda-Barpali-Sardega and Bhupdeopur-Raigarh- Mand area, which could bring nearly 100 million tonnes of incremental traffic to railways and facilitate faster coal transport power plants.
Railways will also facilitate connectivity to the new and upcoming ports through private participation. 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 the participative model policy of Indian Railways, amounting to more than Rs.4,000 crore.
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at http://ift.tt/jcXqJW.
from Top Stories - Google News http://ift.tt/1qHKG8R
via IFTTT
0 comments:
Post a Comment