The government on Tuesday proposed a huge investment of Rs 250,000 crore (Rs 2,500 billion) in next five years for expansion, modernisation and upgrade of railway network, and said it will resort to public-private partnership modal to part finance the schemes.

"We have made a plan to invest Rs 250,000 crore within the next five years. For funding a large portion of this plan, use of internal resources and borrowings will be resorted to," Railway Minister Lalu Prasad said while presenting Rail Budget 2008-09 in the Parliament.

He said that it would be difficult to finance such a large investment programme solely from Railways' own resources and "therefore, we have started many public-private partnership schemes for attracting an investment of Rs 100,000 crore (Rs 1,000 billion) over the next five years".

These will include projects for provision of world-class facilities at metro stations, setting up state of the art rolling stock production units and construction of multi-model logistics parks.

Prasad also announced the Railways will invite global competitive bids for developing railway stations at New Delhi, Patna and Secunderabad, and Chhatrapati Shivaji Terminus in Mumbai. He said concessions would be awarded for developing these stations.

"We expect to attract an investment of nearly Rs 15,000 crore (Rs 150 billion) on these stations. Through open competitive bidding, PPP partners would be selected for setting up diesel loco, electric loco and rail coach factory at an estimated cost of Rs 4,000 crore (Rs 40 billion)," the minister said.

The concessions, committing an investment of about Rs 25,000 crore (Rs 250 billion), are likely to be awarded in 2008-09 for various PPP projects, he added.

Railway Budget 2008-09: Complete Coverage