PRIVATISE THE TRACKS

Railways needs to do more to attract investments

THE GOVERNMENT plans to raise more than `1.5 lakh crore till 2025 from the Indian Railways under the `6-lakh crore National Monetisation Pipeline. An attempt in 2020 to invite private operators on 109 railway routes had received a lukewarm response. The Budget might, therefore, attempt to make such assets lucrative for potential investors. In terms of passenger amenities, though the redevelopment of 400 railway stations is already underway, there is a need to hasten it. “A specific budgetary allocation can be called for this as well and post infra development, the same can be put up for asset monetisation,” says Jagannarayan Padmanabhan, Director and Practice Leader, Transport and Logistics, CRISIL Infrastructure

Advisory. “There is need for enhanced participation of the private sector. A certain amount could likely be set aside for public-private partnership projects including the hybrid build-operate-transfer model being proposed by the ministry.” Despite the pandemic, freight traffic continues to grow and so the allocation to support related infrastructure may see a boost. To augment infra development, the Railways may seek partnerships with state governments, with budgetary support for such special purpose vehicles. Industry would also be keen to have definitive timelines for full operationalisation of projects like the eastern and western dedicated freight corridors and the high-speed railway. “Railways-owned entities like the Indian Railway Finance Corporation can be used as financing vehicles for some of the associated capex projects to grow their business in other associated infrastructure sectors,” Padmanabhan says. Industry’s demand for an independent regulatory authority may also be considered to help attract private capital.