Railway Budget faces low investment challenge
Maneesh Pandey March 12, 2012With just two days to go for the Rail Budget , the Railways' investment story is as 'derailed' as its operations.
Senior Railway Board members admit that the total investment in Railways is not even 10 per cent of what is projected from public-private partnership (PPP) model projects, leave aside the total investment potential of the country's largest transporter.
The total investment potential projected for Railways in 12th Five Year plan is Rs 7 lakh crore, including Rs 1.26 lakh crore in PPP projects alone. But the Railways have been able to manage just about Rs 13,000 crore from three key private investment projects.
The projects included a 1,000-km rail line between ports and roads in the south-western and western zones, investment schemes in wagons and container rakes, and through private participation in construction of private freight terminals.
With Railway Minister Dinesh Trivedi in the firing line to boost revenue and different committees recommending major overhaul to make the Railways modern and safe, an investment worth Rs 10 lakh crore is the least that is required.
According to officials, there is much more the Railways can do without touching the 'contentious and politically sensitive' fare hike issue to raise revenues. Even in PPP investments, the Railways is yet to tap real potential worth over Rs 1 lakh crore in sectors like locomotive manufacturing, stations development, high-speed rail corridors and elevated tracks for faster freight movement.
"Investment in one high-speed corridor between Mumbai and Ahmedabad is worth Rs 60,000 crore. Besides, investment in station makeover plans, where it has not even reached the bidding stage despite being in public domain for over three years, is worth Rs 25,000 crore. An elevated track in Mumbai is worth Rs 20,000 crore and an investment in setting up factories for loco manufacturing would give Railways Rs 5,000 crore," said a senior Board member.
Even in construction of multi-functional complexes (MFCs) through single-window schemes offered by the Railways, only five out of 48 MFCs had materialised and added only Rs 28 crore to the cashcrunched coffers.
Explaining the investor's disinterest, a Board member said, "The returns are slow and the span of investment is too long because of the current financial health of Indian Railways."
Rail minister Dinesh Trivedi is emphasising to make it more investor-friendly and create more single-window opportunities for investors in different rail operation sectors, including catering, station premises maintenance and on-board services," the member, who is an executive director, said.
Officials feel that it's time to junk the ceremonial announcement of unviable projects and new trains every Budget to score political points. Instead, the government should get proactive in pushing its investment policy, including for the fastgrowing Indian food processing and automobile sectors. It must seek private investment in developing cold chains to store processed food and transport fruits and vegetables and push automobiles to use Railways for faster bulk transportation of vehicles.
Courtesy : Mail today