The government has, for the first time, announced that it aims to attract investment worth Rs 100,000 crore in 5 years from the private sector alone.
These investments will be made to provide world-class facilities at metro stations, setting up state-of-the-art rolling stock production units and construction of multi-model logistics parks. The government would further lease out its surplus land to private companies.
Apart from bringing in the funds, the private sector would bring in physical and managerial expertise in developing unutilised assets of the railways, said DLF chief executive Yogesh Verma.
Another real estate industry executive said the railway ministry has already successfully leased surplus land at various places to private players. A large number of realty companies had participated in biddings for railway land. In his Rail Budget speech, the railways minister said container operators, with a minimum net worth of Rs 250 crore, could now lease wagons from the Indian Railways for a period of 20 years. The firms, after registering themselves by depositing Rs 5 crore, could lease special purpose wagons, high-capacity wagons and container wagons.
The ministry would resort to internal resources and borrowings to finance the remaining portion of its investment projects. The railways have an investible surplus of Rs 20,049.24 crore in 2007-08 and it is expected to generate Rs 19,992.03 crore worth of extra funds in 2008-09.
The Rail Budget plans to invest Rs 37,500 crore in 2008-09, up from Rs 31,783.11 crore in the current fiscal year. Global competitive bids will be invited for developing stations at New Delhi, Patna and Secunderabad, and Chhatrapati Shivaji Terminus in Mumbai. "We expect to attract an investment of nearly Rs 15,000 crore on these stations," Prasad said.
However, experts are skeptical of the government's ambitious plans. The ministry's previous efforts to attract private sector participation have not been so successful as the project details were not adequately designed. Regulatory delays and inter-ministerial approvals also adversely affect many projects leased to private players, they say.