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Railways on new track: 17 sectors could get 100 pc foreign, private investment

Ministry identifies 17 areas under FDI guidelines.

Written by Avishek G Dastidar | New Delhi |
Updated: November 12, 2014 10:37:14 am

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The Railways has identified 17 sectors in its operations to allow 100 per cent foreign/private investment. This effectively communicates to investors across the world exactly which areas of India’s rail sector are open, how much and in what ways. The new guidelines, approved by the government under the FDI policy, was also shared with the Bibek Debroy-led high-level committee on Railway Board restructuring earlier this week.

Going beyond expected lines, like high speed railway, freight corridors, suburban lines, the Railways has opened up areas like standalone passenger lines (hill railways), passenger terminals, bio-toilets, technological solutions for unmanned level-crossings, mechanised laundries, testing facilities, and construction of bridges, wherein the private investor is allowed to earn money by levying toll.

In each category, the Railways has created certain conditions which tend to ease the process of foreign investments in the country’s rail sector.

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For instance, the foreign investor building bullet train corridor has been given a free hand to select its design and fares, without any interference from the Railways. Each of the 17 sectors is a thriving industry globally but the Indian Railways has not been able to benefit due to the earlier FDI policy.

In a bold move, the policy also opens the scope for 100 per cent private/foreign investment in standalone passenger lines, like hill railways, for concession. This means that if any private party wants to run the Darjeeling Himalayan Railway and pay the Railways an agreed amount of money in return, the policy will allow it.

For those setting up factories to make or maintain coaches and building signalling systems, the policy says the investor will require no approval from the ministry if there is no procurement commitment from the Railways. This means, the maker is free to build and sell in open market as it pleases.

“There is immense interest in manufacturers across the world to participate in the railway sector. But everyone wants to understand which areas are open to investments and how much. The detailed guidelines fulfil that requirement,” said a senior Railway Board official.

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