Cash-starved Indian Railways sets up departmental panel to speed up FDI

By TNN | 22 Sep, 2014,

The move is a step forward after the Modi government in July decided to permit 100% FDI through direct route in railways infrastructure. 

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NEW DELHI: Faced with a financial crunch and under pressure to perform from the Prime Minister's Office (PMO), Indian Railways has set up a departmental panel tasked to facilitate Foreign Direct Investment (FDI) inflows in the rail sector for augmenting resources.

The move is a step forward after the Modi government in July decided to permit 100% FDI through direct route in railways infrastructure.

Railways, which is directly monitored by the PMO, is also framing five model agreements on private sector participation (including foreign investments).

The five-member committee has to draft sectoral guidelines and to identify potential areas and projects for FDI.

"The panel would interact with potential investors and industry chambers," said a senior official.

The state-run transporter is finalizing the Model Concession Agreement (MCA) for PPP projects which is likely to come up within a month.

An official said these measures would facilitate FDI inflows and private sector participation in railways infrastructure.

The transporter has also initiated proposal to seek Union Cabinet's approval on nine identified projects costing around Rs. 5000 crore to build 310 kilometers of lines, including seven projects of port connectivity.

Recently, the Cabinet had already cleared a proposal to link Jaigarh port near Ratnagiri district with the Konkan Railway.

The port provides an important gateway for cargo flowing in and out of Maharashtra and parts of Karnataka.

Other projects which are waiting cabinet nod include the proposal to build 75 kilometers of new lines to connect the Astranga port in Odisha and the 17 kilometer long new line to connect the Tuna port in Gujarat.