Rail Budget 2012: CII urges to attract private investments in Railways

Currently, investment through Public Private Partnership (PPP) represents just four per cent of all rail investment

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The Confederation of Indian Industry(CII) has urged greater private sector participation in India's railway sector. 

In its pre-Budget memorandum to the Railway Ministry, CII has called for clear guidelines to attract private investments. Currently, investment throughPublic Private Partnership (PPP) represents just four per cent of all rail investment. 

"Improved project implementation, streamlined and time-bound approval processes, providing terms in projects that will allow investors to gain 'reasonable' returns on capital, and more efficient vendor management are some of the areas that can be addressed by the Indian Railways to ensure the growth and sustainability of the sector," noted Chandrajit Banerjee, Director General, CII. 

CII is of the view that the policy should be aimed at attracting private developers by address land issues; equitable sharing of various project risks and ensuring time bound implementation and security of returns on capital invested from private sources. This would help Indian Railways to get better private participation in rail projects and help mobilize more funds from the market. 

In its Vision 2020 document, Indian Railways has estimated an investment of Rs.14,00,000 crore to provide customer focused and environment friendly sustainable integrated transport solutions. Various projects like adding new lines, dedicated freight corridor, modernization of stations, implementation of modern signaling systems, electrification of routes, use of efficient technologies etc. are expected to be implemented. 

Indian Railways needs three times as many locomotives, wagons, and coaches as it currently has, to emulate throughput and efficiency of advanced rail networks globally. 

According to CII, changes required in existing policies like wagon leasing, private freight terminals, special freight train operations, auto-hub, and container train operations are pending and need to be addressed. Further, the CII memorandum has identified land acquisition and land licensing as issues of key concern in many PPP and rail connectivity projects. 

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