Finance Minister Nirmala Sitharaman, during the Union Budget presentation, indicated that the Centre does not have the fiscal space to make the kind of heavy investments that are required to modernize Indian Railways. Hence, the PPP model is being considered by the national transporter.
Indian Railways eyes China-style rolling stock company! In a big initiative, Piyush Goyal-led Indian Railways is looking to corporatise all its manufacturing units under a single entity, which may even be the world’s largest. Financial Express Online has earlier reported Indian Railways 100-day roadmap to bring all its rolling stock, locomotive and wheels manufacturing units under a single entity, the Indian Railway Rolling Stock Company (IRRC). According to an IE report, this new entity will be one of the biggest rolling stock companies in the world, beating bigwigs like Siemens, Bombardier, GE, etc.
The idea of IRRC has been modelled along the lines of China’s CRRC Corporation Limited, the report suggested. The CCRC was established by amalgamating around 40 big and small manufacturing units into one corporate entity in the year 2015. At present, the CRRC in China is the largest rolling stock company in the world. IRRC will also take care of the bottom line.
Finance Minister Nirmala Sitharaman, during the Union Budget presentation, indicated that the Centre does not have the fiscal space to make the kind of heavy investments that are required to modernize Indian Railways. Hence, the Public-Private Partnerships (PPP) model is being considered by the national transporter. The modernization of Indian Railways needs an investment of Rs 50 lakh crore between now and 2030. Indian Railways capital outlay is just around Rs 1.6 lakh crore per annum, and even completing the sanctioned railway projects would take decades.
In its 100-day plan, Indian Railways has proposed to invite private companies to own and operate trains on select routes and also to corporatize seven of its production units that manufacture coaches, engines, and wheels.
According to the report, the powerful trade unions have raised concerns about the privatization of the national transporter, and also its impact on their members. However, Railway Minister Piyush Goyal has clarified that the Modi government is planning only to corporatize some units and further added that there is no question of privatization.