Railways

The railways sector just experienced 4 PPP contracts

valued at INR15.7 billion
47
. The projects have been contractedeither by domestic
competitive bidding or through negotiated MOUs. Due
to the large size of the projects, the PPPprojects in
railways have to be supplementary or an extension to
an existing large railway network.The recent PPP data
48
indicates around nine projects being contracted so far
in Gujarat (4), Orissa (2),Haryana (1), Andhra Pradesh (1)
and Karnataka (1). The nine projects have BOT (or its
variants) format(including one on DBFOT) PPP as the
preferred BOT model. The INR9 billion metro links from
Delhi Metro from Sikanderpur to NH 8, Gurgaon has
the highest value of PPP railway contract so far.The
PPP experience in the railways sector has proven to be
a mixed bag so far. In projects with clear
cutdemarcation of responsibilities, the model has
proven successful such as in the case of last mile portconnectivity(For instance, last mile connectivity to
Mundra port with Palanpur-Gandhidham railway line;
and rail link fromBhadrak to new port at Dhamra in
Orissa). On the other hand, the railways has been
facing problems in using thePPP route for
manufacturing rolling stock and locomotives (two
mega railway projects manufacture of
Electriclocomotives at Madhepura and Diesel Locomotives
at Marhorwa have been on hold).

Investment requirements:
As reported, the Indian railways (IR) require INR5.2
trillion of public investment duringthe Twelfth FYP
(201217) of which the Indian Railway Corporation will
raise INR1 trillion and the balance needs tobe
generated internally or through the form of PPPs. The
IR announced its plans of restructuring to attract
fundingof INR500 billion
49
to meet its expansion targets proposed for the Twelfth
FYP. In order to carry out this, the railwayis currently
working out strategies to design and award PPP
projects. The railways ministry has reportedly, plans
ofawarding projects on locomotive and coach factory
and construction of a corridor for high-speed rail in
Twelfth Planperiod to generate the estimated
investment.
47
PPP India Database as on 31 July 2011
48
PPP data, PPP in India Database, accessed
9 December 2011
49
In track change, Rly eyes R50k cr pvt investment,
The Financial Express website
, http://www.nancialexpress.com/news/In-track-change-Rly-eyes-R50k-cr-pvt-investment/840860/ accessed 19
December 2011
Some of the PPP project initiatives undertaken by the
railways sector include:


Container Corporation of India Limited (CONCOR)
for developing multi modal transport
logisticsinfrastructure to support domestic container
trafc
Pipavav Railway Corporation Ltd. (PRCL)
to provide broad gauge rail link to Port of Pipavav in
Gujarat
Rail Vikas Nigam Limited (RVNL)
for Port connectivity works and improvement of the
GoldenQuadrilateral to meet future transportation
needs

[ Accelerating public private partnerships in India

37
The projects proposed for PPP format
include:

High speed rail corridor

Dedicated freight corridor
Locomotive and coach factories
Multi-modal Logistics hubs

This time
around, we
will indeed
make

adifference
when it
comes to
PPP projects
.Railways

doesnt have
enough reso
urceson its
own and the
government

cant
keepfunding
our plans for
ever. So,
PPP is

theonly way
forward,