Mamata, business chambers to discuss rail PPPs

Union Railway Minister Mamata Banerjee has called a meeting with chambers of commerce on February 6 to discuss how to get more private participation in rail projects.

The meeting is a prelude to the framing of a public private partnership policy for the railways. The ministry plans to announce the policy in the coming Budget. "The new policy is aimed at attracting private developers, who have not shown much interest in railway projects hitherto," said a source in the know.

In the Tenth Five-Year Plan (2002-07), PPP projects by Indian Railways constituted less than one per cent of the total plan outlay for the sector. The projections for the Eleventh Plan (2007-12) are, formally, 20 per cent of the total outlay, which is around Rs 1,00,000 crore (Rs 1,000 billion).

In last year's Budget presentation, the railway minister had said the Railways would be upgrading 50 stations under the PPP scheme. Of these, Delhi station was seen as a test case. But, the Rs 6,000-crore (Rs 60 billion) project has been stuck for two years for want of approval from local bodies such as the Delhi Development Authority, New Delhi Municipal Council, Delhi Traffic Police and so on.

However, the ministry still has big plans on PPP projects. The minister has sent a team to Mumbai to discuss with the industry and find ways to make these projects attractive.

The railways plan to develop their huge land base on a PPP basis. The idea is to give the land to companies for development through revenue generating schemes. Sources said the ministry also plans to fence the land it has across the country to prevent encroachment and stoppage of railway traffic in case of protests. It is likely to be started on the Delhi-Mumbai route.

Last year, Banerjee had set up a committee on innovative funding through PPP under Ficci general-secretary Amit Mitra. The committee gave its first report on September 14. The report called for setting up of multifunctional complexes and world-class stations through PPP.

Subsequently, the ministry set up a high-powered committee under a former member (traffic) of the Railway Board, Sriprakash, to frame strategy to monitor and implement PPP projects.