"We welcome the proposal for financing bulk of future projects through public-private-partnership route that will help overcome the constraint of low investment, enhance connectivity and accelerate the process of modernisation," Federation of Indian Chambers of Commerce and Industry president Sidharth Birla said.
Presenting the Narendra Modi government's maiden Rail Budget, Railway Minister Sadananda Gowda announced setting up of logistic parks and private freight terminals on PPP model.
Noting that the capital intensive 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.
"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," President & CEO South Asia GE Transportation Nalin Jain said at a Confederation of Indian Industry conference in New Delhi.
Asked about potential areas where FDI can be attracted, he said: "Locomotive, manufacturing, wagons anything which is moving, are areas where FDI can come in."
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."
PHD Chamber of Commerce President Sharad Jaipuria said the announcements would go a long way to enhance rail infrastructure and generate employment opportunities.
Chief Executive of Railway Business at Larsen & Toubro Rajeev Jyoti sought more clarity on the proposal to seek Cabinet approval on foreign direct investment.
"If you have an FDI, you are not going to open FDI with no criterion. . . " he 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".
Mahindra & Mahindra CMD Anand Mahindra tweeted: "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.
The Rail Minister also announced connectivity to ports through PPP, procurement of parcel vans and rakes by private parties for resource augmentation.
"If the Railways' efficiency improves, the overall cost of transportation will improve, providing competitive edge to the exporters," EEPC India Chairman Anupam Shah said.
"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," Kapoor said.
Manish Agarwal, Leader of Capital Projects and Infrastructure at PwC India, said that 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.
Chairman of CII National Committee on Chemicals Nadir Godrej said: "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."
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