12th Five Year Plan ending 2017 proposes Rs. 1 Lakh Crore
(USD 20 Billion) investment through PPP (Public Private Partnership), a fifth of
total Rs. 5.2 Lakh Crores (USD 100 Billion) in Indian Railways. The Vision 2020 [presented in 2009] document envisages the need for investment of
Rs. 1.43 Lakh Crores (USD 2.6 Billion) just for clearing the existing backlog
and another Rs. 14 Lakh Crores (USD 260 Billion) in Ten years to reach the goal
of Vision 2020, thus a requirement of at-least Rs. 1.4 Lakh Crores (USD 2.6
Billion) each year between the period from 2010 to 2020.
Areas for investment include Dedicated Freight Corridor, Doubling of
Lines, New Lines, Rolling Stock manufacturing like Wagons, Passenger Cars,
Locomotives, Development of New Railway Terminals, Logistics Parks, Multi-Modal
Freight Terminals, High Speed Corridors, Power Generation for Captive use, ICT,
Catering, and Merchandising etc.
In the recently announced policy by Railways for development of Private
Rail Lines, participants/developers can be State Government, Beneficiary
Industries, Ports, Local Bodies, Corporate, including FDI. Railways have proposed to do away with the
transfer of assets to Railways on completion of lease, which has been a major hindrance
in private investment. ‘Non-Government Railway’
model is proposed to have first and last mile connectivity, which can be
developed on private land and it will be a Non-Government Railway project. Financing, Construction and Maintenance is to
be done by the developer.
Revenues: Railways to pay user fees for usage of infrastructure, which
is calculated at 95% freight computed on the basis of Inter Railway Financial
Adjustment Rules after Cost of Operation and charges.
Indian Railways has also proposed Joint Venture, BOT through Competitive
Bidding, DBFMT (Design, Build, Finance, Maintain and Transfer) and Annuity
Models.
Challenges: Some of the key challenges however remain
unanswered like Operations still vests with the Railways, Policy Support/Flexibility,
Single Window & Timely Approval of Projects, Support during Long Gestation
Period, Support in Land Acquisition/R & R, Funding etc. .
