Delhi may allow private players to operate some railway lines

Some sections of the Indian Railways could be opened up for investment from the private sector, which could operate its own railway lines in return for licence fees, Railway Minister Piyush Goyal said.

Goyal also said that the private sector investment was necessary if the Indian Railways was to raise Rs50 lakh crore over the next five years for modernisation and expansion of railway facilities across the country.

Goyal, who was in Goa, also said that while the government had a “open mind about attracting investment from the private sector, the Indian Railways by itself would not be privatised.”

“There are different models we can follow. We want the Indian Railways to grow. There could be some sectors where the private sector can lay their own lines, we would not have a problem. They can take a licence from us. Railways will be able to increase its revenue. If it can increase its revenue, it will be able to give better facilities to its passengers. Our mind is open,” Goyal said during a press conference in panaji, Goa.

“But Railways by itself will not be privatised. Railways belong to the government, it will stay with the government. The big investment (in the railways sector) belongs to the government and it will be in the service of the public,” he said.

Goyal’s comments come at a time when the Opposition has slammed the ruling BJP-led National Democratic Alliance government for what they see as attempts being made to privatise the Railways.

Goyal also said, that over the last 65 years, until Prime Minister Narendra Modi’s government began in 2014, freight traffic had shrunk 30 per cent and the infrastructure to passenger and freight traffic ratio had widened to astronomical proportions.

“We have also set an ambitious target for increasing of freight on the railways, which has now shrunk to 30 per cent. We have seen that in 65 years, before the advent of the Modi government, investment had reduced in the Indian Railways, as a result of which infrastructure has increased by only 30 per cent and the passenger and freight traffic has increased by 1,500 per cent. The estimate is obviously that passengers and freight will face discomfort and safety will be decreased due to overload,” he said.

The minister also said that while in the year 2013-14 the capital investment allocated to the Indian Railways was only Rs 40,000 crore to Rs 45,000 crore, in the current year, the expenditure on capital investment was Rs 1.60 lakh crore.

Commenting on the investment target of Rs50 lakh crore announced by Finance Minister Nirmala Sitharaman in her Budget speech on Friday, Goyal said that the private sector would be critical to attaining the target.

“But when you look ahead, the government will not be able to invest Rs 50 lakh crore alone. Our efforts are to bring in technology of international standards, (attract) investment or a Public Private Partnership or a TOT (toll operate transfer) model, which yesterday Nirmala referred to,” Goyal said.

Meanwhile, privatisation-bound national carrier Air India might not get financial support from the full Budget 2019-20.

According to highly-placed sources, the airline, which got a meagre Rs100,000 as extra budgetary support in the interim budget, might not even land a spot in the expenditure document this time.

However, in the interim budget, the government had allocated Rs2,600 crore to Air India Asset Holding, a SPV which is being used to park the majority of over Rs 55,000 crore debt of the airline.

On June 27, the Central government decided to restart the divestment process of national passenger carrier and its five subsidiaries.

As per the Ministry of Civil Aviation, continued support from the government had resulted in improvement of financial and operational performance of the airline.

The development comes after the Air India Specific Alternative Mechanism (AISAM), in a meeting last year, decided against divestment at that time due to issues like volatile crude oil prices and adverse fluctuations in exchange rates.

“However, continued support from the government had resulted in improvement of financial and operational performance of Air India. As per the recommendations of AISAM, the government will now go ahead with the process of disinvestment of the company,” the Ministry said in a statement.

In December last year, the Centre had prepared a revival plan for the airline, comprising a comprehensive financial package and sale of non-core real estate assets.

The plan comprised of several major elements such as a comprehensive financial package including transferring of non-core debt and assets to a SPV (special purpose vehicle) and strategic disinvestment of subsidiaries.

Besides, the Centre infused Rs 2,345 crore into the financially strained national carrier under its ‘Turn Around Plan’.

Indo-Asian News Service