Railway Construction_ProjectsMonitorPrime Minister Dr. Manmohan Singh recently approved the constitution of an inter-ministerial group to clear the backlog of projects sanctioned in the railway sector. As per the approval, the group, consisting of Chairman, Railway Board and Secretaries Finance and Planning Commission, would come up with a creative financing-cum-implementation mechanism for enhancing investment and for clearing the backlog of projects of an estimated Rs.2 lakh crore on a prioritised manner.

At present, there are about 350 projects of Indian Railways, some of which are pending completion since the 1980s for want of funds and other reasons. In the current fiscal, the Railways received Rs.26,000 crore from the central government as gross budgetary support to improve rail infrastructure across the country while a sum of Rs.14,000 crore is expected from internal resources.

This apart, Railways has reportedly received few bids for public-private partnership projects other than those related to port connectivity. According to an official statement, port connectivity projects worth Rs.3,800 crore have attracted private investors. The Ministry of Railways has given approval for five out of six port connectivity projects, namely Astranga, Dighi, Jaigad, Dhamra and Rewas. The sixth project, Hazira, is pending approval. The port connectivity projects would receive about one-third of the estimated Rs.6,000 crore investment in PPP projects allotted for the current fiscal.

The Dighi and Rewas ports in Maharashtra’s Raigad district would be attached to Konkan Railway at Mangaon-Indapur. Astaranga port in Puri, Odisha, plans to invest Rs.700 crore towards building a 73-km rail link. The Palanpur-Samakhiali link in Gujarat is expected to get Rs.1,000 crore private investment. Maharashtra’s Jaigad port and Gujarat’s Hazira port plan to invest about Rs.700 crore in building rail connectivity. Astranga and Dhamra port projects are private lines under model 1 with 10 per cent private investment.

A senior official said, “The participative policy of December 2012 has made things simpler for private players. Earlier, we failed to attract investments in joint ventures and customer-funded models as there were funding issues and lenders didn’t have confidence in the revenue model of projects.”

APPROVED PORT CONNECTIVITY PROJECTS
Astaranga, Odisha Navyuga Engineering
Dhamra, Odisha JV of L&T & Tata Steel
Rewas, Maharashtra RVNL & Reliance
Dighi, Maharashtra Balaji Infra & RV
Jaigad, Maharashtra JV of Konkan Rail & Jindal Group

A model under the participative policy specifies that 95 per cent of the net apportioned revenue, after deducting the operation and maintenance outlay, has to be shared with the private party. The concession period of 25 years would also be extended up to 35 years.

Another project to be implemented through PPP on DBFOT basis is urban rail connectivity worth Rs.24,000 crore, linking Oval Maidan in south Mumbai with Virar north of Mumbai, a distance of over 50 km. The RfQ for the elevated corridor with a length of 62.28 km has already got four-five extensions. Till now six bidders have taken the forms, namely ILFS, GMR, L&T, CAF, R-Infra and Gammon India. About 95 per cent of land is already with the Railways.

Although the coal and port connectivity projects have got a fresh lease, they are still far from picking up the desired momentum. The budget allotted for the Railways is insufficient to complete the large number of pending projects. The operating ratio of the Railways is around an unhealthy 895, leaving it with very little money for completing projects. The PPP target for the 11th Plan was Rs.66,000 crore compared to the 12th Plan target of Rs.1 lakh crore. However, the Railways could achieve just 4 per cent of its 11th Plan target.

The five approved port connectivity projects are undergoing feasibility studies. “It is not yet clear when the concessionaires would be exchanged and by the current pace of development, most conservative figures indicate that it will take more than two years for the studies to be completed and a further plan to be chalked out,” a source from Railways added.

Meanwhile, coal connectivity projects worth Rs.4,000 crore, as set out in the budget speech, have made progress with the signing of an MoU between Chhattisgarh government, IRCON and South Eastern Coalfields Ltd. Under the MoU the three partners would invest in the ratio of 10:26:64, with SECL as the lead investor. Under the project two lines are proposed to be built between Bhupdeopur-Raigarh and Gevra Road-Pendra Road stretching over 300 km. The project is expected to be completed through SPV route in three to four years.

Now with the Prime Minister’s approval for constitution of an inter-ministerial group, the Railway Board has decided to prioritise the projects to be completed.


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