Presenting his maiden Rail Budget, Railway Minister Sadananda Gowda announced setting up of logistic parks and private freight terminals on PPP model. JPN/Agencies
Noting that the Indian Railways has not been successful in raising substantial resource through PPP route, Gowda said that bulk of future projects would be financed through this mode, including the high-speed rail, which requires huge investments.
The Railway Minister also announced connectivity to ports through PPP, procurement of parcel vans and rakes by private parties for resource augmentation.
What industry leaders say?
“We welcome the proposal for financing bulk of future projects through public-private-partnership (PPP) route that will help overcome the constraint of low investment, enhance connectivity and accelerate the process of modernization,” said Federation of Indian Chambers of Commerce and Industry (FICCI) president Sidharth Birla.
“Once you do a PPP it stands on its own. A special purpose vehicle gets created separately and that company is accountable for its return on investment. So, the Indian Railways will benefit from it if it's profitable, otherwise it will not benefit," said Nalin Jain, president and CEO South Asia GE Transportation.
“Movement of goods from and to ports is critical- this will surely help create jobs in the export sector in inland locations having rail connectivity. Locomotive, manufacturing, wagons anything which is moving, are areas where FDI can come in,” Chairman of CII National Committee on Chemicals, Nadir Godrej, said.
CII president designate Sumit Mazumder said, “If projects are made attractive to private investors, funds through PPP and FDI will be available. Multilateral funding should also be accessed for high speed corridors.”
Managing Director of Alstom Transport India, Bharat Salhotra, said, “Opening the Railways' sector to foreign direct investment is a welcome move that would provide the much- needed push to the cash-strapped sector as well as foster creation of world class rail infrastructure.”
“The announcements would go a long way to enhance rail infrastructure and generate employment opportunities,” said PHD Chamber of Commerce president Sharad Jaipuria.
“More clarity is needed on the proposal to seek Cabinet approval on foreign direct investment (FDI). If you have an FDI, you are not going to open FDI with no criterion,” Chief Executive of Railway Business at Larsen & Toubro, Rajeev Jyoti, said.
Mahindra & Mahindra CMD Anand Mahindra said, “Renewable energy inputs, e-enablement, more pvt sector involvement. And no megalomaniacal schemes. What more were the markets looking for?”
Assocham president Rana Kapoor said, “The PPP models will attract a lot of private and overseas investment as the new government enjoys a great amount of credibility to deliver. Overall focus on project management, e-governance and institutionalizing process to involve states in all key decision making will ensure that Railways becomes the true lifeline of the nation.”
EEPC India Chairman Anupam Shah said, “ If the Railways' efficiency improves, the overall cost of transportation will improve, providing competitive edge to the exporters.”
“Given limited success on station modernisation projects so far, the implementation remains to be seen. The Railway Minister had said that some stations will be developed according to international standards through PPP model,” said Manish Agarwal, Leader of Capital Projects and Infrastructure at PwC India.
Steel major SAIL chairman C S Verma said, “The thrust on close monitoring of dedicated freight corridor projects, new high speed and semi-high speed projects, track renewal, development of wagon leasing business, upgradation of stations, procurement of rolling stock, doubling and tripling of lines and gauge conversion is likely to boost steel consumption.”
Federation of Indian Export Organisations president M Rafeeque Ahmed said, “The Railway Budget focuses on implementation, IT and privatisation which will go a long way in improving the functioning of Indian Railways with added user satisfaction.
MD and Group CEO of Jindal Steel and Power Ltd (JSPL), Ravi Uppal, said, “The impetus to encourage PPP models and FDI in Railways are very encouraging, will mobilise resources and go a long way to reduce borrowings for the ministry.”
Hindustan Chamber of Commerce vice-president Hasmukhlal D Vora said, “The Budget is ‘very ambitious’ and speaks volumes of long term proposals to bring the Railway into profit stream.”
Managing Director of Transport Corporation of India, Vineet Agarwal, said, “ I hope that the continuous push to electrification, gauge conversion and new lines will make the railways and the logistics sector more efficient.”
MD at Thomas Cook (India), Madhavan Menon, said, “We are delighted with the impactful new initiatives of both high & semi-high speed projects, the addition of 17 premium trains and 38 express trains, also the enhanced road-rail connectivity to key tourist locations. The Railway Budget is visionary and long term in impact and a significant step towards developing new tourism hubs.”
Managing Director at Jindal SAW, Sminu Jindal, said, “The announcement of battery-operated cars to ferry the old and differently-abled at all major railway stations is an encouraging step. However, a safe corridor to manage traffic and to ply these battery operated cars for elderly and disabled between platforms needs to be developed.”
Chairman of American Chamber of Commerce in India, Arun Jain, said, “The intent to promote private investment, FDI and adopt the PPP route are welcome steps. These should open up opportunities for quality global infrastructure companies to participate in India's growth.”
Partner at KPMG India, Jaijit Bhattacharya, said, “The much-needed support for PPP as a significant source of investment capital is the backbone of providing the strategic financial headspace. The focus on safety and security is much appreciated.”
PwC India Leader Capital Projects and Infrastructure, Manish Agarwal, said, “The budget is practical and the one which is focused on completing ongoing projects. Focus on one bullet train initially, and up-gradation of existing infrastructure for higher speeds on other sectors, is a good balance between affordability and desire.”
Deloitte Touché Tohmatsu India senior director Vishwas Udgirkar said, “The Railway Budget has tried to sound a note of pragmatism. It appears pragmatic but implementation is the key.”
Tirupur Exporters' Association (TEA) president A Sakthivel said, “I appreciate the announcement of cleanliness activities, Bio Toilets in trains, mechanisation of loading and unloading of goods and revamping of e-Ticketing System. The budget failed to address the long pending request of night train from Coimbatore to Bangalore and Coimbatore to Tuticorin.”
“We welcome announcements, like more thrust on passenger amenities, cleanliness and efficient station management including through PPP,” said Coimbatore chapter of Indian Chamber of Commerce and Industry (ICCI).
Chamber President R R Balasundharam said, “Early completion of gauge conversion between Coimbatore and Pollachi, which will help the exporters is needed.”
S Namburajan, Secretary, Tamil Nadu Association for the Rights of All Types of Differently Abled and Caregivers, said, “ Many demands, including accepting Disability Certificates or cards as valid documents and not press for obtaining a separate certificate for availing concessions, had not been accepted.”
Presenting his maiden Rail Budget, Railway Minister Sadananda Gowda announced setting up of logistic parks and private freight terminals on PPP model.