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Group set up for public-private tie-up in railways
Monday, 16 October 2006, 19:30 IST
NEW DELHI: An advisors' group has been set up to draw up a clear-cut road map for public-private partnership in the Indian Railways in the 11th plan period (2007-12), Railway Minister Lalu Prasad said Monday.
Inaugurating a conference organized by FICCI and the railway ministry, Yadav said that while he was against "blanket privatization", he desired the private sector in the development of railway's non-core sectors.
"We would want close coordination and liaison with the private sector for which the advisors' group, comprising representatives of apex chambers and retired senior members of the Railway Board, will be consulted to take the PPP (public-private partnership) projects forward," he said.
The minister listed out the areas that would lend themselves to PPP.
These include upgradation and creation of world-class railway stations, cold chain and warehousing facilities for farm produce at 7,000 railway stations, railway siding and logistics parks, wagon development, rail connectivity with ports, and the proposed dedicated freight corridor.
Lalu Prasad lauded the efforts of railway staff for their contribution to the turnaround of the Indian railways. He assured them that "he was against blanket privatisation of the railway system. However, the private sector was being encouraged to participate with the railways in the development of its non-core activities".
Railway Board chairman J.P. Batra pointed out that the railways were looking for an investment of over 
3 trillion ($65.9 billion) by 2015.
This would be to cover a host of activities such as port connectivity, gauge conversion, dedicated freight corridors along with improvement of feeder routes, asset renewal and augmentation of high-density routes and augmentation of manufacturing of rolling stock.
Responding to the observations by FICCI president Saroj Kumar Poddar, Batra said: "While we continue to prioritize and take up high priority short-gestation from internally generated resources, we would also like to execute a sizable shelf of remunerative projects through the PPP route."
To be successful, PPPs would require a transparent policy framework that sets out the rights and duties of the concerned parties and "we have already set up a dedicated PPP Cell in the ministry to work in this area", Batra pointed out.
Batra said that besides involving the private sector in the operation of container trains, the Dedicated Freight Corridor Project, upgradation of railway stations, the railways had set up a Rail Development Authority to put the 43,000 hectares of vacant railway land to proper economic use.
"We are also considering a PPP model for agricultural rail side warehouses by using surplus land," he said.
This would offer an opportunity to the private sector to open agri collection centers-cum-retail outlets at railway stations which would help generate parcel and container traffic for the railways and provide a market at the door step of the farmers.
While lauding the railways for the turnaround in its performance in the last two years, Poddar called for allowing the private sector to bring in design rail wagons on an exclusive basis subject to clearance of the design by the railways.
Once approved, the private sector would be willing to invest, provided the railways assured sufficient orders over a five-year period to allow for cost plus reasonable returns on investment.
Poddar sought change in the tendering system as it favored only L1 (lowest cost bidder) and was delay-prone.
"This needs to be reformed to reduce the time and also to ensure that frivolous bidders who quote artificially low prices are weeded out."
Source: IANS
3 trillion ($65.9 billion) by 2015.
This would be to cover a host of activities such as port connectivity, gauge conversion, dedicated freight corridors along with improvement of feeder routes, asset renewal and augmentation of high-density routes and augmentation of manufacturing of rolling stock.
Responding to the observations by FICCI president Saroj Kumar Poddar, Batra said: "While we continue to prioritize and take up high priority short-gestation from internally generated resources, we would also like to execute a sizable shelf of remunerative projects through the PPP route."
To be successful, PPPs would require a transparent policy framework that sets out the rights and duties of the concerned parties and "we have already set up a dedicated PPP Cell in the ministry to work in this area", Batra pointed out.
Batra said that besides involving the private sector in the operation of container trains, the Dedicated Freight Corridor Project, upgradation of railway stations, the railways had set up a Rail Development Authority to put the 43,000 hectares of vacant railway land to proper economic use.
"We are also considering a PPP model for agricultural rail side warehouses by using surplus land," he said.
This would offer an opportunity to the private sector to open agri collection centers-cum-retail outlets at railway stations which would help generate parcel and container traffic for the railways and provide a market at the door step of the farmers.
While lauding the railways for the turnaround in its performance in the last two years, Poddar called for allowing the private sector to bring in design rail wagons on an exclusive basis subject to clearance of the design by the railways.
Once approved, the private sector would be willing to invest, provided the railways assured sufficient orders over a five-year period to allow for cost plus reasonable returns on investment.
Poddar sought change in the tendering system as it favored only L1 (lowest cost bidder) and was delay-prone.
"This needs to be reformed to reduce the time and also to ensure that frivolous bidders who quote artificially low prices are weeded out."
Source: IANS