Mumbai: India’s federal rail budget aims to boost public-private partnerships to help revive its weak infrastructure but wagon makers and rail operators are not cheering yet as they awaited clarity, company officials said.
Rail minister, Mamata Banerjee on Friday said a new coach factory would be set up in public-private partnership and plans to develop 50 stations with international-level facilities and multi-functional complexes at 50 railway stations.
But, operators wanted more details on the revenue-share and structure of public-private model.
“A lot of money needs to be spent and the amount of money she’s talking of to be spent is just enormous,” chairman Ajay Mittal, rail operator Arshiya International Ltd said.
“That cannot be done without public-private partnership and for that you need clarity.”
With a 63,327 kilometre long network, the railways form an integral part of Indian life, transporting over 18 million passengers and over 2 million tonnes of freight daily.
But, nearly two-thirds of the country’s cargo is still transported over roads, and the railways opened the sector to private players to carry containerised cargo to regain share.
Indian railways said it would invest Rs18.8 billion in freight corridor project in 2009-10, dedicated for cargo, with focus on the eastern-side. It is also considering passages in north-south, east-west, east-south and south.
Banerjee set a target of 882 million tonnes of freight traffic in the fiscal year that ends in March 2010 after the target in the interim budget in February was unrealistic, with the slowdown hitting FY09 cargo movement.
Freight cargo rose 5% in FY09.
Still, rail operators cheered no changes in freight rates and the encouragement of private operation of freight terminals.
The railways also plans to launch double-decker coaches for inter-city travel and plans to spend Rs33.93 billion on wagons and locomotives, Banerjee told lawmakers in the budget.
Wagon manufacturers including state-owned BEML said they sought partnerships and joint ventures to build the much needed supply.
“She is trying to balance out the socialistic obligations and little bit of development of the projects that the railway needs,” said A.K. Vijay, senior vice president of Texmaco, which also looking out for tie-ups for coaches.
The budget ordered 18,000 wagons compared with 11,000 last year and Vijay said he expects at least a fourth of the share.
Also, a new policy will allow construction and operation of private freight terminals and multi-modal logistic parks, helping builders such as GVK Power & Infrastructure Ltd and IVRCL Infrastructures, analysts said.
“This is a good direction they have started. There was some momentum lacking in the last one year, so at least this year the momentum will take place,” Arvind Gemini, director, Kalindee Rail Nirman, told television channel ET Now.
Kalindee makes and supplies railway equipment such as signalling, telecommunication projects and rail lines.
Shares in state-run Container Corp Of India ended up 4% at Rs1,010.4 while Arshiya International finished 5% higher at Rs122.35, in a market that ended 1.7% up.
Wagon makers, on the other hand, reversed gains falling 4.5-5% on profit booking, dealers said. They rose up to 3% ahead of the announcement.