Lalu invites pvt sector to board railway story

Amidst the largesse that Railway Minister Lalu Prasad Yadav today doled out in his last and most populist rail budget...

Amidst the largesse that Railway Minister Lalu Prasad Yadav today doled out in his last and most populist rail budget, was a strong intent to get the private sector on board the railway turnaround story. The minister today said that of the Rs 2.5 lakh crore of rail investments planned over the next five years, at least Rs 1 lakh crore would have to come in through the public private partnership (PPP) route- this, even as PPP projects announced earlier are yet to take off in any significant way.1he railway minister today proposed a number of schemes where private participation could come in, such as projects for provision of world class facilities at metro stations, setting up of state of the art rolling stock production units and construction of multi modal logistics parks.

However, PPP schemes introduced in the railway budget over the last couple of years are yet to see the light of day. “A couple of years back, the Railways announced the establishment of a diesel locomotive manufacturing unit at Marora, an electric locomotive unit at Madhepura, a rail coach factory at Chhapra and another one in Rae Bareilly,” says Akhileshwar Sahai, President (infrastructure advisory), Feedback Ventures.

“But factories like the Rae Bareilly one are yet to move forward due to problems in transfer of land and other issues.”

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According to Sahai, the major hiccups in the implementation of PPPs in the rail sector have been slow decision making by the government and the Railway’s “having its cake and eating it too” attitude. Others feel the problems have much to do with inadequate transparency and necessary framework required to take PPPs ahead. “The Railway’s proposal to involve private companies in more projects is much needed. But it will only be viable if a transparent framework of competitive bidding is in place,” says Rajeev Jyoti, Managing Director, Bombardier Transportation India and Chairman of CII Railway Equipment Division, while adding that private players are keen to bid for railway projects that the minister announced today.

The minister today said that concessions for developing the New Delhi, Chattrapati Shivaji Terminus, Mumbai, Patna and Secunderabad railway stations into world class stations would be awarded in the coming year, at an investment of around Rs 15,000 crore.

“Through open competitive bidding, PPP partners would be selected for setting up diesel loco, electric loco, and rail coach factory at an estimated cost of Rs 4000 crore. It is also expected that container trains, container depots and multi modal logistics park will attract investments to the tune of Rs 2000 crore,” Lalu informed. Apart from this, the Rail Land Development Authority would raise Rs 4000 by making commercial use of Railway’s surplus land. With this, concessions committing an investment of about Rs 25,000 crore are likely to be awarded in the coming year for various PPP projects.

Earnings* 2008-09 Rs 72,755 cr

• Coolies to get Class IV employee status

• Major thrust to Information Technology, infrastructure, public private partnerships

• Major concessions for women, student passengers

• 53 new trains announced

Earnings 2007-08 Rs 63,120 cr

• Freight rationalisation continues

• Cash surplus before dividend crossed Rs 20,000 crore

Earnings 2006-07 Rs 54,600 cr

• Public private partnerships get major thrust

• Container segment privatisation gets 14 applicants

• Reduction of losses in passenger business

Earnings 2005-06 Rs 46,635 cr

• Opening up of container operations to private organisations l Countrywide extension of universal enquiry number

• Integrated railway modernisation plan of Rs 24,000 crore formulated

Earnings 2004-05 Rs 44,902 cr

• Safety measures like provision of anti-collision devices

• New wheel manufacturing unit at Chhapra

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