The Indian Railways will mobilise private resources, both domestic and foreign direct investments, and leverage surplus of rail public sector undertakings (PSUs) to fund infrastructure, including high-speed trains.

“The Railway Ministry is seeking Cabinet approval to allow foreign direct investment (FDI) in the rail sector, except in rail operations,” Railway Minister DV Sadananda Gowda said in his Rail Budget speech for 2014-15. Attracting FDI is important as internal revenue sources and Government funding are insufficient to meet the requirement for funds for rail infrastructure, the Minister added.

PPP route The public-private-partnership (PPP) mode, which has so far not been successful in raising substantial resources for the Railways, will be the main source of funding for all future projects, he said.

Investments needed in the ongoing and proposed rail projects is huge with the Golden Quadrilateral Network alone requiring additional funds of ₹9 lakh crore and each bullet train needing an investment of ₹60,000 crore.

The note for the Cabinet includes proposal to allow 100 per cent FDI in suburban corridor, high-speed train systems and dedicated freight line projects implemented in the PPP mode.

As regards using surplus funds of Rail PSUs, the Ministry proposes to launch a scheme to use this money in infrastructure projects. Rail PSUs, including Container Corporation of India, IRCON, RailTel Corporation and RITES, are all performing well, which is reflected in their higher dividend payouts annually.

PPP projects will also be encouraged to develop a network of freight terminals, augmenting capacities on congested routes and develop greater port connectivity, Gowda said. The Railways has plans of using private funds to protect its vast land assets and leverage it for raising resources.

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