Railways scouting for private players to speed up projects

New Delhi, Oct 7: Privatisation is buzzing rather loudly in the corridors of Rail Bhavan, the nerve centre of the Railway Ministry.

Having travelled some distance on the path of privatisation, Indian Railways today spelled out new initiatives and offered an array of exciting opportunities to private players to make its incredible turnaround an enduring success.

Making a power point presentation on 'Building Railway Infrastructure --- Challenges and Opportunities' at the Infrastructure Conference at Vigyan Bhavan, Railway Board Chairman J P Batra said the institutional mechanism for facilitation of Public Private Partnership was already in place with the creation of a dedicated PPP Cell in the Board.

''A decision to allow private operators in container services has already been taken and a Model Concession Agreement (MCA) is under finalisation,'' Mr Batra told the conference, presided over by Prime Minister Manmohan Singh.

Besides Rs 22,000 crore Dedicated Freight Corridor Project, the avenues for PPP include world class railway stations, passenger amenities and commercial utilisation of 43,000 hectares of land available with the Railways.

Mr Batra said some projects such as freight terminals and logistics parks would be set up exclusively with the assistance of the private sector.

Operation of container trains and setting up of SPVs for manufacturing locomotives, coaches and wagons and hospitality, tourism and catering sectors were other areas, which were unfolded before private players for their participation.

Public sector undertakings of the Railway Ministry, such as IRCTC and Rail Vikas Nigam Ltd (RVNL), and Freight Marketing Directorate of the Board are already working to rope in private investment in respective areas.

Among the other opportunities for PPP, Mr Batra listed super-speciality hospitals, construction of private sidings, inland container depots, parcel services and rail side warehouses.

In addition, there are wagon investment scheme and port connectivity and other infrastructure projects through RVNL, which are to be built on the PPP model.

IRCTC is spearheading budget hotels on the BOT model and also inviting private players for setting up Food Plazas, static and on-board catering services and laundry service. ''While economically unremunerative and socially relevant projects will be carried out through budgetary resources, the economically remunerative high-priority, short-gestation and high-return projects will be met through internal generations,'' Mr Batra said.

However, all other projects would be carried out through PPP, which had emerged as a serious option, he said.

Pointing out that there were substantial gaps between requirement and available locomotive and coach manufacturing capacity, he said joint ventures for capacity augmentation was under consideration of the ministry, which had already announced a long-term procurement programme for wagons.

On the occasion, he also unfolded 'Vision 2015' for the Railways, which includes construction of 6000 km track for doubling and port connectivity, 12,000 km for gauge conversion and 11,500 km for dedicated freight corridors (DFC), upgradation of feeder routes of of DFC on a route length of 25,000 km, development 16 stations as world class stations and modernisation of passenger and freight terminals.

These projects would entail an investment of Rs 3,50,000 crore, he said.

Sounding upbeat about the future prospects, he said Indian Railways, whose fund balances had gone up to Rs 12,654 crore in 2005-06 from mere Rs 359 crore in 2000-01, was on a perfect launching pad for a take-off.

''In view of a high growth trajectory of the GDP, freight traffic is poised to grow at 8-10 per cent per annum while passenger traffic growth rate is pegged at 6-8 per cent per annum,'' he said, making a strong case for a sound infrastructure to be in place to capitalise on the opportunity.

About the main constraints, he said major traffic carrying routes connecting the four metros and the diagonals were saturated.

Another problem pertained to mixed traffic as 65 per cent of passenger trains and 35 per cent of freight trains shared the same track. Coupled with inadequate passenger handling capacity at major stations, this could pose a major challenge to the railways, he said.

The drivers of growth, he said, could come in the form of reduction of tariffs in real terms, dynamic and market-driven tariff for freight and premium passengers, lowering of unit costs through higher volumes, increase in axle load and improvement in turn-round of wagons, optimisation of asset utlisation (track, wagons, coaches and locos) and focus on customers.

UNI