Rail Budget signals FDI, private-public partnerships

Announcing the Narendra Modi government’s first Railway Budget, Union railway minister DV Sadananada Gowda said he plans to introduce a bullet train on the Mumbai-Ahmedabad sector and establish a Diamond Quadrilateral network of high-speed rail networks to connect major metros and growth centres.

Gowda said the single bullet train would cost Rs 60,000 crore and admitted that the government would have to look for ways to raise resources for the project. The Diamond Quadrilateral would cost about Rs 900,000 crore.

Gowda proposed FDI in the railways but not into its operational aspects. He added that PPP (Public-Private-Partnership) is the way forward and that it will be the government’s endeavour to finance the bulk of future projects through the PPP mode, including the high-speed rail.

Other highlights of the Railway Budget include:

-New trains – 58 in all – as well as increasing the speed of trains to 160 to 200kph  on nine select sectors.

-In terms of financials, the Budget estimates for 2014-15 assumes a freight    loading   of 1,101 metric tonnes, 51 metric tonnes more than the previous year  and growth   in passenger traffic at 2 percent and freight earnings at Rs 105,770  crore.

-Proposes higher funds allocation for ongoing projects in the North East, including  11 national projects. Funds to the tune of Rs 5,116 crore earmarked for projects in  the North East, 54 percent higher than the previous year.

-Much-needed passenger safety gets a mention in the Budget with the minister  proposing to recruit 4000 women RPF constables.

-Minister states that Rs 40,000 crore would be needed to be invested in track    renewals, elimination of unmanned rail crossings and road overbridges and  underbridges. A provision of Rs 1,785 crore has been earmarked for railway  overbridges and underbridges.

-Railway reservation system is being revamped to move into next-generation e-      ticketing system that will support 7,200 tickets per minute and allow 1,20,000  simultaneous users.

Commenting on the Railway Budget, Madan Sabnavis, chief economist, CARE Ratings, said:” The focus has been on improving quality of rail services. The use of PPP is pragmatic as it frees government resources. One can see benefits through backward links to IT, wagons, steel (for new tracks) and construction (underbridges).