“Private participants and foreign investors are keen. I am not sure about $100 billion, but yes, it has to start with a big idea” – Parvesh Minocha
In a chat with media, Parvesh Minocha, Group MD-Transportation, Feedback Infra, talks about opening up of private investments in railways. Excerpts:
Q: The rail minister has clearly stated that $100 billion worth of investment is required and they are inviting private participation in the railway sector. How keen would private participants be to invest in the railway sector?
Parvesh Minocha: Private participants and foreign investors are keen. I am not sure about $100 billion, but yes, it has to start with a big idea.
Currently are there projects which can absorb even a fraction of that? No. But like the minister said, he is going to come up with ideas and bring them to the table. If that happens, there is certainly money available to be invested in the sector.
Q: Do you speak to participants on the private side who would be willing to invest?
Parvesh Minocha: Investment in railways is typical of all infrastructure investments. Railways are still not talking about giving up the operations. Therefore returns are reasonably certain given the volumes which it has and the projection which the private parties will make.
Players are very similar too. There are no great new players who are not there in the rest of the infrastructure space. Most of the players are common. A lot of it is actually interconnected.
Q: Have you had talks with any investors who may have approached you for an investment?
Parvesh Minocha: We have got many inquiries in the last three-four months. Currently it is mostly about EPC. There is investor enthusiasm, but in the absence of ready projects I am not sure we are going to see ready interest. A lot will depend upon what the railways do and how they treat prospective investors.
Q: I am asking this question more from a stock market perspective: a lot of people were banking upon these reforms coming in and suppliers to the railways actually benefiting out of it. Do you think it will happen over the course of the next 18-odd months? Do you think the order books of the wagon manufacturers, the signal equipment manufacturers, etc., will start getting filled in?
Parvesh Minocha: If you look at metro rail, it is already happening at full blast. Will it start happening for wagons, etc., too through the normal supply route? I think Yes, through the privatisation route will take a while, because when you want PPP participation, it takes time to bid, finalise, do the financial closure and then start work.
Eighteen months seem a good time, but I do not expect it to happen in the next six months, particularly from a PPP angle. From an EPC or a normal supply angle it may happen, but not from a PPP angle.