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    Default Panel trashes Railways' reliance on PPP route for funding projects

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    A parliamentary panel has alerted the railways that resource generation through the public-private partnership (PPP) is intrinsically difficult due to a long gestation period and relatively low returns, and has suggested it should explore other avenues.

    "The railways should explore other avenues of revenue which have a comparatively low gestation period," said the Parliamentary Standing Committee on Railways in its latest report.

    The cash-strapped network headed by Railway Minister Mukul Roy, who partially rolled back the fare hike announced by his predecessor Dinesh Trivedi to generate some additional revenue, is banking heavily on the PPP route to fund its mega projects.

    The committee noted that a shortfall of Rs 31,150 crore in the extra budgetary resources during the 11th Five Year Plan was primarily due to low mobilisation through the PPP route as the railways met the target through market borrowings.

    As a result, noted the panel, projects like creating world class stations could not take off as approvals from the Delhi, Bihar and Maharashtra governments could not come, engine factories at Madhepura and Marhowra in Bihar got stalled as contracts could not be finalised, and port connectivity projects were delayed due to land acquisition problems.

    The panel said it is not convinced with these reasons cited by the railways for the delay in the big projects as most of the issues could have been solved with a bit of focused effort.

    "The committee is not convinced with the reasons submitted as most of these procedural delays could very well have been overcome had the ministry put in a focused effort in this direction," said the panel report.

    Noting that the railways are encouraging PPP in areas like connectivity to ports and industrial clusters, setting up private freight terminals, operating trains and special freight trains, wagon investment schemes and utilising available land, the panel has said most of these projects may not fructify during the current 2012-13 financial year.

 

 

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