In a step that could help speed freight movements in the country, the Indian government has approved a proposal to allow private investment for the development of rail-related infrastructure projects.
The policy reform, which came amid vigorous opposition from labor unions in state-owned Indian Railways, is expected to lower transportation costs and increase Indian Railways’ freight traffic volume.
“The policy framework and the private participation models for rail-connectivity and capacity augmentation projects suggested would facilitate speedy execution of rail connectivity projects,” an official statement said. “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.”
Officials said the policy calls for five investment models, including non-government railway, joint venture with equity participation by Railways, capacity expansion through funding by customers and build-operate-transfer concession. “Model agreements would be finalized shortly,” officials said.
Container Corporation of India, an offshoot of Indian Railways, was a monopoly for container rail operations until the government opened the sector to private players in 2006 and issued licenses to several new operators, including local logistics arms of global shipping lines.
Indian Railways carried 565.37 million tons of freight traffic from April through October (the first seven months of fiscal year 2012-13), up about 5 percent compared with the same period last year.