Decision soon on FDI in rail projects, fare hike

With PPP to be a key area in the coming budget, railways want the policy to get finalised at the earliest

The cash-short railways want to tap funding from the private sector and is likely to take a decision on foreign direct investment (FDI) projects shortly.

Minister Sadananda Gowda has met his commerce and industry counterpart, Nirmala Sitharaman, in this regard. Some key projects expecting FDI funding could be a part of the railway budget.

And, the pending decision on a fare rise is likely next week. The railways had put a 6.5 per cent increase in freight rates and 10 per cent in passenger fares under the fuel adjustment component on hold, awaiting the formation of a new government.

NOT ON TRACK
Some key focus areas for the railways

• Clean and hygienic stations and trains
• Ensure 100 per cent punctuality of trains
• Change the working culture, shed hierarchy
• Engage more with ground-level officers  for new solutions
• Ensure safety of women and elderly

“We are short of resources and we need to mobilise all possible avenues of funding. We are holding discussions with the ministry of industry and commerce and very soon, we will come out with the course of action. The decision on fare hike will come in the next four-five days,” said Gowda to the media after a meeting of general managers.

With public-private partnerships to be a focus area in the coming budget, the railways want the policy to get finalised as soon as possible. Port connectivity projects expecting FDI funding could be a part of the coming rail budget.  Last year, private players had shown interest in various port connectivity projects worth over Rs 3,800 crore.

Also, projects such as the locomotive factories for Marhowra and Madhepura have evoked the interest of various international companies. The two projects are estimated to cost Rs 3,400 crore. However, these companies require more clarity on policy.

In December 2012, the railways ministry had notified a Policy for Participative Models for rail connectivity and capacity augmentation projects, after a government notification of 2012 permitted foreign investors in construction of fixed rail infrastructure projects and maintenance.

Also, the earlier draft cabinet note on FDI in the railways said it should be permitted in operations for certain cases like high-speed train systems and dedicated freight lines. With the new government's thrust on both, a clear policy for private-foreign participation becomes fundamental for the future course of action.