Railways to implement 20 projects under EPC mode

Railway Minister Suresh Prabhu on Thursday informed parliament that at least 20 development projects will be taken up under the engineering procurement and construction (EPC) mode during the next financial year.

"To ensure participation of large professional players in IR (Indian Railway) projects and minimising cost and time overruns, I had announced moving to EPC based contracting last year," Prabhu said while presenting the Railway Budget - 2016-17.

"I am happy to announce that we have finalised the standard document for undertaking works through the EPC mode and will implement at least 20 projects through this mode in 2016-17."

According to the minister, by the fiscal 2017-18, all projects valued at over Rs.300 crore will be awarded through EPC contracts.

The EPC mode entails that the contractor builds the project by designing, installing and procuring necessary labour and land to construct the infrastructure, either directly or by sub-contracting.

However, unlike PPP (public private partnership), the financing is done by the government and not by banks or private equity funds through issuing of sovereign bonds or taking financial guarantees for the project.

The minister elaborated that Indian Railways will seek services of private firms in non-operational areas such as cleaning and facility management.

Prabhu also disclosed that the railways will rely on technological solutions for project management and monitoring.

"It is intended to use the latest drone and geo-spatial based satellite technology for remotely reviewing the physical progress across major projects," the minister added.

"In the next financial year, this would be operationalised for monitoring the progress on dedicated freight corridor."