Railway projects are capital intensive and have long gestation, which poses challenges for investors, Kharge said
The railways is keen to get more private investment and also wants the government to tweak the FDI Policy so that foreign investment can flow into the rail sector, Railway Minister Mr. MallIkarjun Kharge tells in an interview.
Railway Finances are in bad shape. Are populist measures going to continue in railways?
We are incurring losses in passenger segment because fares are kept low. But it would not be correct to do away with this in one day. It will put much burden on the poor. We have to think of the poor. At the same time, we have to make railways economically viable. We have to do a balancing act. Railways is a wonderful organization. It has been able to sustain itself over the years as there is good coordination between the employer and employees.
There is a revenue shortfall of around Rs 4,000 crore. Are you going to cut expenditure on safety-related works?
There will be no compromise on safety. There is improvement in passenger and freight earnings. We will cut expenditure on peripheral activities. We will also think about taking up construction of new railway lines.
Railways has set an ambitious target for private investment. What steps are being taken to attract private investors?
Railway projects are capital intensive and have long gestation, which poses challenges for investors. Public Private Partnership (PPP) models were announced for rail connectivity projects. In-principle clearance has been given for rail connectivity to ports of Jaigarh (Maharashtra), Ashtaranga (Odisha), Rewas and Hazira. We have also approved rail connectivity under private line model for Dharma port.
We are also implementing two coal connectivity projects in Chhattisgarh through joint venture route. An investment of Rs 3,800 crore for port connectivity, Rs 4,000 crore for coal mine connectivity and Rs 800 crore for iron ore mine connectivity is likely to be generated in the next few years. We are also working on the elevated rail corridor project in Mumbai through PPP with support from the state government. We have also invited bids for electric locomotive factory at Madhepura and diesel locomotive factory at Marhowrah, which are joint venture projects.
Another area is redevelopment of stations. We have set up Railway Stations Development Corporation Limited (IRSDC). The agency will take up redevelopment of stations to provide modern amenities such as segregated arrival and departure halls, shopping malls and budget hotels comparable to international standards by leveraging the development of real estate in and around the station. To begin with, the agency has taken up five stations — Chandigarh, Anand Vihar, Bijwasan (a greenfield station), Habibganj (Bhopal) and Shivaji Nagar (Pune). Contracts for these stations will be awarded by the end of 2013-14 fiscal.
What other steps are being taken to improve the financial health of railways?
Railways is keen to seek FDI in infrastructure projects. We have approached the commerce ministry with a proposal to make suitable changes in the existing FDI policy to enable us to attract FDI in rail sector.
Lok Sabha elections are due early next year. Are you going to continue with the fuel adjustment component?
Fuel Adjustment Component (FAC) was announced in the budget. It is going to be a permanent feature. It has Parliament’s approval.
In the past, Railway Ministers focused on their constituencies. Is Gulbarga going to get special attention?
The question is not about my area or your area. Entire India is ours. As a minister, I am performing a national duty. Projects worth Rs 1.75 lakh crore are pending. The focus is on prioritizing these projects and completing the unfinished work. Railways also has a number of cost sharing projects with state governments to bring in investment.