The railways have shown little faith in the government?s public-private partnership model. The railways have decided to fund the Rs 28,000-crore dedicated freight corridor project on their own with a little help from the Japanese.
According to fresh estimates, the rail ministry plans to finance the ambitious project using internal generation of funds, debt (including loan from Japan Bank for International Cooperation) and budgetary support.
This tentative financing pegs debt at Rs 18,000 crore, budgetary support at Rs 2,500 crore and internal funds at a significant Rs 7,500 crore.
Confirming this, a railway official told FE, ?The Japanese loan comes with certain riders, one of them being that, we will need to get any funding through the PPP route sanctioned by the bank.? The official added that the Japanese indicated they were not keen on public-private funding.
The decision comes even as the finance ministry and the Planning Commission felt the project would turn out to be too expensive for the railways to fund on their own. In a counter, railway ministry officials say if the ministry makes Rs 20,000 crore in profits annually, it can easily use about Rs 5,000 crore for the project every year for five years.