Model concession agreement for PPP projects in Railways soon

Indian Railways is all set to come out with a model concession agreement (MCA) for executing its projects under public-private-partnership (PPP) mode, Union Railways Minister D V Sadananda Gowda said here today.
"We are coming up with a model concession agreement (with regard to policies). We are getting it ready and it will come out within a month," the minister told reporters after a review meeting with officials of South Central Railway (SCR).
Model concession agreement, is a framework of contract that sets the terms for incentives and targets for the private player.
On foreign direct investment in the railways, Gowda reiterated, "We will not entertain FDI in the operating part. We will allow FDI only for creation of infrastructure and other developmental activities. Certainly, there will be no FDI in existing sector."

"We may seek FDI only for operation of high speed rail and dedicated freight corridors. FDI entry will not be in other areas," he said.
Asked about participation of foreign and local investors in railways, the Railway Minister said, "private sector players are coming in large way. We want to take railways to newer heights, without (private) investment it may not be possible for us at present."

Reacting to a query on drop of passenger traffic, he said, "It (decline in passenger traffic) is of around two per cent.. not because of price hike but due to different reasons. Withdrawal of 'Izzat Pass' is one of the reasons. It will not affect revenue. Passenger traffic will gear up in coming months."

On setting up of a new railway zone in Andhra Pradesh as proposed in the AP Reorganisation Act-2014, in the aftermath of the bifurcation of the State, Gowda said Indian Railways has constituted a committee to examine the proposal.
"A committee has already been set up which is supposed to give a report before October 14 to the Railways. I am waiting for that report. Soon after getting it we will move ahead. Certainly newly formed states will be given some preference," he said.