Public private partnership (PPP) is the only way out, Ministry tells parliamentary panel

Even with an annual capital expenditure of about ₹1.6 lakh crore for the Railways — which is the highest-ever — it will take decades to complete the sanctioned projects, the Ministry of Railways told a parliamentary panel on Monday, adding that public private partnership (PPP) is the only way out.

The Ministry told the Standing Committee on Railways headed by former Union Minister and BJP leader Radha Mohan Singh that the transporter needs ₹50 lakh crores to complete the sanctioned projects till 2030.

“Given that the capital expenditure outlays are around ₹1.5-1.6 lakh crore per annum, completing even all sanctioned projects would take decades,” it said in its presentation. The Ministry said the only way out is using private investment.

The Centre said it does not plan to privatise the Railways and Union Minister Piyush Goyal had clarified in the past that there was a proposal to outsource the commercial and on-board services of a few trains and to permit private players to induct modern rakes to run trains on select routes to improve services.

As per the Ministry, ongoing projects as on August 1, 2019 include 188 new lines, 55 gauge conversion and 255 doubling of existing lines. The length under the 188 new lines is 21,295 km, of which the Railways has so far only commissioned 2,622 km at ₹85,536 crore as on March 31, 2019.

Gauge conversion

Similarly, in gauge conversion 7,274 km work has been sanctioned out of which only 3,573 km has been commissioned so far costing ₹19,640 crore. In case of doubling of existing lines, 20,500 km work has been sanctioned while only 2,800 km was commissioned till March 31, 2019 at an expenditure of ₹48,342 crore. Apart from this, the government has set a target of 100% electrification of broad gauge lines by 2023.

According to sources, the committee members objected to the absence of Railway Board Chairman V.K. Yadav at the meeting. They summoned him for the next meeting and asked the Ministry to come up with clarifications. “The basic question is why is the Railways taking over new projects without first completing the unfinished ones. The officials were unable to answer this question,” one member said.

As on April 1, 2018, the Railway network is 68,442-km long. Of this, 63,491 km is broad gauge, 3,200 km meter gauge and 1,751 km narrow gauge.

For 2019-20, Finance Minister Nirmala Sitharaman had proposed a capital expenditure of over ₹1.60 lakh crore for the Ministry. This is the highest-ever allocation for the national transporter surpassing the previous year’s ₹1.48 lakh. The outlay comprised ₹65,837 crore from budgetary support, ₹267.64 crore from the Nirbhaya Fund, ₹10,500 crore from internal resources and ₹83,571 crore from extra budgetary resources.