New Delhi: The aspirations of railway minister Mamata Banerjee have made certain the entry of private capital into the ministry’s new initiatives as internal resources are inadequate to support her plans.
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Banerjee announced a number of capital-intensive proposals in her budget speech that includes starting a power plant and providing cold-storage facilities. In most cases, these plans would be executed in partnership with private companies, she said while presenting the Railway Budget for the fiscal year to March 2010 in Parliament on Friday.
“The rapid expansion has to be done with private capital,” said a member of the Railway Board, the railways’ top decision making body.
Private investors have already shown interest, the member said on condition of anonymity. The private sector is happy with the tenor of Banerjee’s speech, having seen viable business opportunities.
“This budget is unique in the way inclusivity and overall development has been the focus without losing focus on safety, technology adoption and commercialization, while providing opportunities for industry through its capacity expansion programme and setting up infrastructure through PPP (private-public partnership) mode,” Chandrajit Banerjee, director general of industry lobby group Confederation of Indian Industry, said in a statement.
Although the private sector sounded upbeat about investment prospects, the track record of the railways has not been good in this regard.
Banerjee’s predecessor Lalu Prasad also planned to use such partnerships to finance some of the Indian Railways’ new initiatives.
It has, however, not been able to successfully bring to a closure a big initiative with the help of private capital, the board member said.
Banerjee pointed out that in the ministry’s annual plan for fiscal 2009-10, Rs3,300 crore of Rs3,400 crore through private sector partnerships “would just not materialize”.
Soon after the minister’s speech in Parliament, Rakesh Chopra, Railway Board member, engineering, said the current economic slowdown was responsible for many commitments that were made not being carried through by private investors.
The railways has appointed an expert group that would draw up a business plan to help the ministry do better in future negotiations for private investment. “We would be much more wiser and go ahead with it,” Chopra said.
Among the new initiatives that are likely to be supported by private capital are the development of 50 stations with “international-level facilities”.
Banerjee also promised to “develop new innovative ideas for land and air space utilization for commercial purposes through the PPP mode”.