Investor-friendly railway framework soon: Minister

Railways Minister Suresh Prabhu on Friday told a large gathering of private investors and financial institutions his ministry would put in place an investor-friendly framework to transform the national transporter into an efficient organisation.

“We have to put in place a framework to facilitate investment on a long-term, sustainable basis. The idea is to make Indian Railways better than what it is today, in three years,” Prabhu told industry captains at an investor meet here. He clarified the railways would continue to be owned by the government “but we welcome the private sector in infrastructure development”.

Railway Board Chairman Arunendra Kumar said the discussions at the day-long meet involved an overview of five models of participative policy, framework of engineering, procurement and construction contracts and sectoral guidelines for foreign and domestic investment.

“We will now hold two similar meets in January and February, apart from conducting roadshows overseas to attract more investments. We will address all concerns and bring about changes in policy to suit the investors,” he said.

The meeting between rail ministry brass and investors also deliberated on a new model concession agreement under the public-private partnership mode and new projects like station development to be rolled out under PPP.

The meeting was attended by representatives of Reliance Infrastructure, Larsen & Toubro, Siemens, Adani Ports, GMR, Tata Infrastructure, Gammon, Jindal Steel and Power, JSW, Bombardier, GE, Alstom, Electromotive Diesel, Bharat Heavy Electricals, NMDC, HSBC and JPMorgan.

Kumar said the investors complained of a lack of stability in  policy governing privatisation.

“Railways has informed the new policies that have been finalised. We are keen (to invest) and are watching the developments in the sector.

"There is an attempt by the railways to correct the imperfections in earlier policies on private participation.

"The industry gave its suggestions and informed the ministry of issues,” Reliance Group Chief Executive A K Mishra said after the meeting.

Private players currently engaged in various PPP schemes and consultants, including Deloitte Tousche Tohmatsu and PricewaterhouseCoopers, were also present at the meeting.

The newly refined Model Concession Agreement would form the basis of a revival of PPPs in the Railways.

The Comptroller and Auditor General had in July pulled up railways for lacking a coherent policy on PPP and pointed out loopholes in contract designs. Indian Railways is currently working on a target to attract Rs 6,050 crore (Rs 60.5 billion) in rail PPP projects in the current financial year.

Asked whether the benefit of the ongoing decline in crude oil prices will be passed on to consumers, Kumar said there will be no change in the passenger fares at least till the next year's budget in February.

He informed the impact of fuel price changes on fares comes after a lag of an entire year.

The ministry also announced today it has set up a committee under D K Mittal, former secretary financial services to recommend ways to improve Railways’ financial health.

Image: People travel in an overcrowded passenger train. Photograph: Ajay Verma/Reuters