For the cash-hit railways, public private partnership (PPP) projects are best bets for growth and modernization. But barring port-connectivity, there is little investor interest in other PPP projects. This has become all the more evident with the interest shown by some of the country?s leading infrastructure players for lucrative port-connectivity projects in recent weeks.
According to Rail Bhawan sources, roughly a third of the envisaged R6,000-crore investment in PPP projects in the current fiscal would be made in port-connectivity projects.
?The interest has been such from the private sector in port connectivity that we may even surpass our 12th Plan target of private investment in port connectivity in the second year of the Plan period ?itself,? a Rail Board official said.
Dhamra Port, a joint venture (JV) of Tata Steel and L&T, Reliance Industries? Rewas Port, Balaji Infra Projects’ Dighi Port and Navayuga Engineering?s Astaranga are some of the names that have received the railways? nod to build rail links under a participative policy of rail connectivity.
In the 12th Plan, the railways expects R5,000 crore as private investment in port connectivity projects, but the renewed private sector interest, fueled by the new participative policy in port projects, the railways may surpass the five-year target in just two years.
The total PPP target for railways in 12th plan is R1 lakh crore, achieving which remains a distant dream. ?The participative policy, brought in December last year, has made things a lot simpler for the private players. Earlier, we failed to attract investments in joint ventures and customer-funded models as there were bankability issues and lenders didn’t have confidence in the revenue model of projects,? another ?senior railway official said. ?
Under the participative policy, there is a model that says 95% of the net apportioned revenue after deducting the operation and maintenance costs will be shared with the private party. The concession period of 25 years is also extendible up to 35 years.
The Orissa-based Dhamra Port will build a 60-km rail link, connecting the port with the nearest rail line costing Rs 760 crore.
Dighi and Rewas ports in Maharashtra?s Raigad district will invest around Rs 400 crore each in building 30 km of track each, connecting Konkan Railways? line at Mangaon-Indapur, while Astaranga in Orissa?s Puri will be building a 73-km rail link costing Rs 700 crore. Palanpur-Samakhiali is also expected to get Rs 1,000 crore of private investment. Jaigad port in Maharashtra and Hazira port in Gujarat are also expected to invest around Rs 700 crore in building rail connectivity.
?There will be several other projects which will come up. Rail linkages with port will also boost investment in private freight terminals, for which the 12th plan target has been set at Rs 2,800 crore,? the railway board official added.
Railways? PPP record has been dismal so far.
In the 11th Plan, private investment was 4% of the outlay, far less when compared to the private capital share in other sectors such as ports (80%), telecom (82%), electricity (44%), airports (64%) and roads (16%).
In 12th plan, projects such as station modernization, constructing of 534 km of eastern freight corridor stretch, high-speed rail corridor project, energy projects, coach manufacturing units and several other have failed to attract any response from the private sector.
