Railway Minister Mamata Banerjee, while announcing a list of projects and plans for the Indian Railways in the Railway Budget, once again reiterated that the main consideration of the railways in the coming years would be the balance of two factors — economic viability and social responsibility.
However, balancing the stated twin objectives will require the support of every stakeholder and this in turn has resulted in the increased need of private sector participation. Moreover, the hitherto approach of the Indian Railways to depend upon its internal accruals to fund its infrastructure development programmes would no longer be tenable. The circumstances accentuate the need for involving the private sector in both financing and development activities.
Keeping this in mind, Ms Banerjee has announced aggressive plans to promote private participation in several projects such as development of new lines, world-class stations, rolling stock factories, multi-level parking complexes and potable water bottling plants. However, looking at the experience of previously announced public-private-partnership (PPP) projects of the Indian Railways, the same appears to be demanding. To achieve these PPP targets on a realistic basis, the Ministry of Railways would need to develop an enabling policy framework and institutional mechanism. It would need to ease the procedural barriers in the process of awarding the projects, structure the projects to make them financially attractive and take measures to reduce the risk perception of private developers.
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