Capacity expansion plans of the cash-strapped Indian Railways was supposed to hinge on the public-private partnership (PPP) model, with two former railway ministers ? Lalu Prasad and Mamata Banerjee ? endorsing it. However, the model in its existing form could fail to attract the requisite investments, feels current railway minister Dinesh Trivedi.
In an interview with FE, Trivedi said the model was ?non-transparent?, stymieing quick decision-making.
The national transporter needs R14 lakh crore for its capacity expansion programme by 2020, out of which two-thirds is expected from internal accruals and private companies. However, as railways? surpluses evaporate and operating ratio (money spent to earn R100) touches 100%, private investment seems the only way to achieve capacity expansion. Railways has not increased passenger fares in the last eight years.
Trivedi said: ?I have to admit that current processes (of PPP) are not transparent and do not expedite decision-making. Railways must have a transparent bidding process. You can?t try to outsmart each other.?
Delays have plagued R1 lakh crore worth of key rail infrastructure projects in Bihar, West Bengal and Kerala, planned to be executed jointly with the private sector. In 2007, the railways began the process to build electric and diesel locomotive units at Bihar?s Madhepura and Marhaura, respectively, shortlisting five international engineering firms in 2010. However, financial bidding was repeatedly postponed, and in the meantime the bidding documents were changed to include clauses on procurement quantity, land lease, lower scope for price escalation and technology transfer.
Meanwhile, eight private sector companies in the shortlist to build a coach factory at West Bengal?s Kanchrapara remain clueless about the status of their application since the railways has started talks with the state-owned Steel Authority of India without informing them. The railways was earlier in talks with state-owned Bhel for this project. It is in talks with Bharat Earth Movers, to set up a coach factory at Palakkad in Kerala.
Trivedi maintains railways? commitment to PPP. ?We remain committed to public-private partnerships, but it should be a win-win situation for the interested parties. Nobody will invest if the projects are not profitable and if documents are tilted in our favour, but we have to consider our needs also. A huge opportunity exists for the industry and I am excited at the prospect of delivering the goods and believe me, things will happen,? he said.