Railways must tap private funds: Ahluwalia

The railways should leverage its revenues to raise money from the market to modernise and expand its facilities, planning commission deputy chairman Montek Singh Ahluwalia said in New Delhi on Monday.

"We need to have more money and it is not going to be available in the Budget; therefore revenues should be collateralised and borrow a significant amount," Ahluwalia said at a seminar on 'public-private partnership in development of rail infrastructure'.

There should be some organic change to ensure that money is actually flowing to the projects that are bankable and "the only real guarantee for that is if you have ideally completely non-recourse funding", he said.

The current legal framework prevented the railways from borrowing directly; the sector has to find ways to tap private resources for its development projects, Ahluwalia said, observing that public-private partnership included joint activity wherein suppliers of services brought in finances from the private sector.

Ahluwalia also said that the railways needed a rail tariff authority, which would rationalise fares and also take care of cross subisidies.

Speaking at the seminar, minister of state for railways Naranbhai Rathwa called for change in rate-of-return proposition for balanced development of infrastructure.

He said the Rail Vikas Nigam had undertaken 56 bankable projects with an investment of Rs 12,000 crore (Rs 120 billion), which would be completed within the stipulated time frame.