"Rail infra expansion needs private investment"

Last Updated: Thu, Apr 04, 2013 15:12 hrs

New Delhi, Apr 4 (IBNS) Railway Minister Pawan Kumar Bansal on Thursday said private investment is needed for expansion of railway infrastructure.

Bansal inaugurated International Conference on Dedicated Freight Corridor 'Challenges and Opportunities' organized by ASSOCHAM India here on Thursday.

The Minister also released ASSOCHAM-YES BANK Knowledge Report "Corridors for India's Economic Development" on this occasion.

In his inaugural address, Bansal said that Indian Railways have increased its freight loading capacity and have achieved the distinction of joining one billion tonne select club in freight movement by successfully loading 1010 million tonne in 2012-13.

"India joins China, Russia and USA for this milestone achievement. However, Railways share as compared to roads in total goods traffic has come down from 80% to 36% over the years which is a cause of concern," he pointed out.

The Minister said that Railways provide a more cost effective, efficient, faster and environment friendly mode of transportation.

"The freight trains have a capacity to move a very large volume of traffic in one go over a very large distance and help in declogging the roads. Hence, there is a need to increase the rail share in the overall transportation in the country," said Bansal.

The Railway Minister pointed out that continuous sustained growth in Indian economy over the last one decade has led to increase in the transportation demand tremendously.

Bansal said that the high density networks of Indian Railways are already oversaturated and not able to provide enough track for passenger and freight trains.

"Thus the Government, therefore, decided to create 'freight only' rail networks and indentified six such corridors for dedicated freight movement," he added.

The Railway Minister informed that in the first phase Indian Railways started works on two corridors namely 1499 km long Western DFC from Jawahar Lal Nehru Port (JNPT) in Mumbai to Dadri/Tughlakabad (Near Delhi) and 1839 km long Eastern DFC from Ludhiana (Punjab) to Dankuni (Near Kolkata).

Regarding funding of Dedicated Freight Corridor (DFC), the Railway Minister said that initial funding agreements for Western DFC through JICA and part of Eastern DFC (Ludhiana-Khurja-Kanpur-Mughalsarai) through World Bank have already been formalized while Mughalsarai-Sonnagar section of Eastern DFC in being implemented through own resources of the Ministry of Railways and remaining 534 km.

Sonnagar-Dankuni section of Eastern DFC is proposed to be implemented through PPP. He said that dedicated corridors will be able to carry heavier axle load of 32.5 tonnes paving the way for transporting 10,000 to12,000 tonnes freight per rake which is about 3 times more than the existing tracks.

"There has been sufficient progress on both the corridors and around more than 80 per cent land has been acquired, some contracts have been awarded and some bridges have been built. Referring to the containerized traffic," he said.

The Minster said that the Ministry of Railways has recently addressed the concerns of the container train operators and have reduced haulage charges for them.

He said that through forward of railway projects (announced earlier) of new line construction, gauge conversion, doubling, electrification is to the tune of Rs. 1,50,000 crore.

The Minister said that there is a need for private investment for expansion and development of Railway infrastructure to the extent possible.

Bansal said that Ministry of Railways has formulated a policy framework for private participation in rail connectivity and capacity augmentation projects which contains five models.

He said that first-mile and last-mile and inter-connecting lines for the entire freight commodity basket would be covered under the policy.

The policy would provide much-needed impetus to building of critical missing links in railway network and evacuation from ports, mines, big industrial units and plants, the Minister added.

Bansal said that there has been a good response to this policy and the private sector is coming forward for this.

The Minister said public-private partnership is an important way forward for the Railways' growth and the possible areas could be redevelopment of stations, construction of high speed corridors, Mumbai elevated corridor etc.

He said that the Kakodkar committee and the SAM Pitroda committee have also underscored the significance of PPP models for expansion and growth.

He said there is a need to synergies efforts of public and private sector for the common good of the nation.

Appreciating the role of ASSOCHAM India, the Railway Minister said that their efforts will go a long way in achieving national objectives of economic growth.

Speaking on the occasion, R.K. Gupta Managing Director, Dedicated Freight Corridor Corporation of India Ltd., said that the dedicated freight corridor project is one of the most ambitious and largest rail infrastructure projects ever undertaken in the history of Indian Railways.

Gupta said that a very unique contracting strategy called 'Design build and lump sum' has been adopted in DFC for the first time for developing rail infrastructure in the country.

Referring to the progress in DFC, Gupta said: "The first major civil contract covering a length of about 343 kms. has recently been awarded and we are in the advanced stage of awarding another contract for abut 650 kms. length. The procurement action on all the segments of the project are in various stages of progress and we hope to award contract to cover over 1500 kms of route by the end of the current financial year."

Gupta pointed out that these freight corridors would create huge potential for industrial development all along its route which would provide ample employment generation opportunities in the region.

He hoped that the Conference will provide an excellent forum for the Railway researchers, partners policy makers and industry leaders to deliberate on various challenges and opportunities available on this project.

Amitabh Kant, CEO & Managing Director Delhi Mumbai Industrial Development Corporation Ltd. (DMICDCL), made a presentation about the industrial towns and investment regions which are being developed along the dedicated freight corridor.

Raj Kumar Dhoot, MP & President ASSOCHAM gave the welcome address.

The Conference had three technical sessions namely: DFC's -Current Scenario and Operational Challenges, Financing options and Investment Opportunities and Technological Innovations & Opportunities in Heavy Haul Rolling Stock.

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