Financial Daily from THE HINDU group of publications
Thursday, May 19, 2005
Financial Daily from THE HINDU group of publications Thursday, May 19, 2005 |
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Logistics
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Railways Public-private partnership — Rly Ministry to submit policy paper to Cabinet by Sept Mamuni Das
New Delhi , May 18 THE Indian Railways could finally be opening its doors for increased private participation. The Prime Minister's Committee on Infrastructure has asked the Ministry of Railways to submit a policy paper on public-private partnership (PPP) in various areas, including running goods trains between specific points such as coal mines and power stations and running passenger trains between tourist destinations. "The Ministry has agreed to submit its report to the Cabinet by September 2005," official sources said. There are areas like cold storage trains; or requirement of special wagons to move automobiles, hot rolled steel coils and petroleum products, where the Railways could benefit by partnering with the private sector. These are few segments where there is a market for transporting goods by trains but the Railways is not able to cater to the entire segment, pointed out a senior official. This has resulted in the customers using other modes of transportation like road; or evolving other methods like use of pipelines for petroleum transportation. By tying up with the private sector in these areas, the total market for rail transportation could increase resulting in benefits for the Railways and the private sector. Similarly, PPP in running passenger trains between tourist destinations could be a further extension of Railways' Palace on Wheels services that cater to premium tourist segment, which are run in partnership with the respective State tourism departments. Under the Palace on Wheels model, while the State Tourism Department buys coaches, does billing and furnishing of the coaches and provides staff related to provision of hospitality services, the Railways maintains the trains, provides locomotives and path (rail track) on which the train can run. The revenue is shared on a 50:50 basis between the Railways and the tourism department. "There are areas like hospitality which are called for while running special tourist trains. This is not an area where the Railways has an expertise. Thus it makes sense to have PPP here," said a senior official. The Railways has announced its intention to allow private sector to participate in provision of container train services from ports to hinterland. Moreover, PPPs have been created for laying the rail network for port connectivity that include Pipavav Railway Corporation Ltd, Kutch Railway Company Ltd and Hassan-Mangalore Rail Development Company.
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