Draft policy aims to draw private sector to railways

The recent rail budget highlighted the financial problems faced by Indian Railways, which have translated into deteriorating amenities and infrastructure and declining safety. The government has been seeking private participation to reduce the cash crunch that Indian Railways has faced for a decade, albeit with little success.

In the latest attempt to attract private investment, the Ministry of Railways has issued the “Draft policy for private participation in rail connectivity and capacity augmentation projects”. State governments, local bodies, ports, large import and export companies, co-operative societies, infrastructure and logistics providers, and others would be invited to participate under the draft policy.

The stated aim of the draft policy is to increase private investment in rail infrastructure projects consistent with the projected 9% GDP growth rate of the economy. To achieve this, the ministry has proposed six generic models to be applied depending on the scope of the underlying project.

Saurabh Bhasin is a partner in the Delhi office of Trilegal, where Lzafeer Ahmad is an associate. Trilegal is a full-service law firm with offices in Delhi, Mumbai, Bangalore and Hyderabad.