Getting babus on board on Rlys may prove tough

The government has given its nod for private investment in railways. The state-run transporter had earlier suggested that connectivity to ports and mines would be developed by the owner or concessionaire as private railway lines by acquiring land and making investments in it, and the lines could be declared non-government railway (NGR) for public carriage of goods.

In a statement,the government, however, said the model agreements for private participation—ranging from NGR to BOT, joint ventures and capacity augmentation via funding by customers—would be finalized soon.

The move comes as the railways, in the absence of fare increase, has failed to generate resources to fund modernization, leave alone capacity addition, despite successive rail ministers adding new trains to appease their constituencies. In fact, the railways has repeatedly failed to meet the targets.

Although the cabinet cleared the proposal on Thursday, the government will need to get the bureaucracy on board as it has repeatedly blocked any attempt by the private sector to get a toehold.

For instance, the move to allow private container operators has proved to be a nonstarter as the railways decided to give public sector player Concor priority. Similarly, Lalu Prasad’s plans for PPP locomotive factories in Marhaura and Madhepura, both in Bihar, are still to take off despite interest from companies such as GE.

Even this time, the unions are opposing any attempt to hand over operation and maintenance to private players, which could deter investors looking to enter the BOT space to build new lines.

Citing poor finances, they are, however, not opposed to letting private players invest in infrastructure development,indicating thatthey are on board for an EPC-like arrangement where the private sector only builds projects, and invests in it.

“We don’t have any problem with private sector participation in infrastructure development. But we will oppose if railways tries to hand over operation and maintenance to private companies,” said Shiv Gopal Misra, general secretary, All-India Railwaymen Federation.

http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2012/11/23&PageLabel=17&EntityId=Ar01702&ViewMode=HTML

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