Railways to Adopt PPP Model for Developing New Projects

30 Dec 2024 CW Team

Indian Railways is set to adopt the Public-Private Partnership (PPP) model to develop new infrastructure projects. The shift towards PPP aims to alleviate the financial burden of large-scale infrastructure projects and attract private investments, which could be redirected toward the social sector. This strategic move will involve key commercial lines, such as mineral corridors, along with other critical economic infrastructure.

The government believes that private investment will free up capital for social infrastructure, boosting overall development. Railways is looking to build new corridors for energy, minerals, and cement transport, estimated to cost over Rs 5.25 lakh crore by 2031. These corridors are expected to improve connectivity and reduce congestion in high-traffic regions. The implementation of PPP models will focus on successful models, such as Merry-Go-Round (MGR) networks used for short haul freight, where private entities will finance rail tracks, and Railways will manage operations and rolling stock.

The Indian Railways’ move toward PPP models for infrastructure projects is in line with an emphasis on capital expenditure, with significant funding expected in FY26. However, passenger services will continue to be fully managed by the Railway Board, keeping sensitive fare and passenger movement decisions within their purview.

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