Indian Railways' New PPP Policy
Indian Railways has developed a new Public-Private Partnership (PPP) policy that identifies approximately 50 projects for implementation under this framework. The Union cabinet is expected to consider this new policy shortly, which aims to replace the existing PPP policy from 2012.
Objectives of the New Policy
- Minimize revenue risk for railways.
- Incorporate measures to reduce litigation and encourage arbitration for quicker dispute resolution.
- Encourage private participation in railway projects, addressing the current lag.
Investment and Revenue Recovery
- The new policy allows private investors to recover a usage fee through tariffs on freight movement.
- Railways will benefit from a revenue share and some fixed income from these projects.
Key Projects and Sectors
- Focus on building key projects like commercial lines and mineral corridors using the PPP model.
- Projects are chosen for their high rate of return, such as port connectivity and mineral corridors, ensuring double-digit returns.
- The current list includes 17 projects operating under the existing policy, like the Pipavav Railway Corporation.
Focus Areas for Private Sector Investment
- Emphasis on coal and port connectivity projects due to assured freight visibility.
