Indian Railways will need Rs 50-trillion investments between 2018 and 2030 to improve infrastructure, said Finance Minister Nirmala Sitharaman on Friday, indicating private participation in a sector that’s the largest state employer.
"Railways will be encouraged to invest in suburban railways through special purpose vehicles (SPVs) and enhance metro rail network through PPPs," she said in her Budget speech in Parliament.
Public, private participation (PPP) in Railways will include passenger and freight services. Sitharaman indicated the government may use private investment in railway tracks and rolling stock manufacturing. She said the government is looking at private participation because at current pace of capital investment of Rs 1.5-1.6 trillion, it could take decades to achieve the target of Rs 50 trillion.
The Niti Aayog, in a strategy document in December 2018, had said that the Railways should consider opening up the ownership and operations of freight terminals and ownership of locomotives and rolling stock to the private sector. It said privatisation will improve performance and investments. Indian Railways has already lined up Rs 1 trillion for redeveloping 400 stations across India.
In addition, four new dedicated freight corridors (DFC) are planned. Sitharaman said that the proposed DFCs will mitigate the congestion in the existing rail network. "We are in the process of completing DFCs," she said. The Eastern and Western Dedicated Freight corridors are expected to be commissioned by 2021, with an investment of Rs 81,459 crore. On the other hand, two other corridors, East-West and East-Coast DFCs at investments of around Rs 1.23 trillion are also expected to be in place by 2027.
Sitharaman added that a national transport card for that can used on various modes of transport will be introduced. "This card can also be used as transport card in bus, payment of toll taxes, parking charges and for withdrawing money," she said.