Railways to Adopt PPP Model for New Infrastructure Projects

30 Dec 2024 CW Team

The Indian Railways is looking to implement the public-private partnership (PPP) model for developing new projects, including new commercial lines such as mineral corridors.

This shift in strategy follows an infrastructure review meeting attended by several ministries, where it was highlighted that the Railways needs to consider PPP for infrastructure creation instead of solely relying on the engineering, procurement, and construction (EPC) model. Despite the proposed shift towards the PPP model, Indian Railways is expected to receive a significant boost in capital expenditure in the FY26 budget, surpassing the Rs 2.62 trillion (tn) allocated for this fiscal year.

After limited progress in developing projects via the PPP model, Indian Railways continues to exclusively fund its infrastructure development, run freight trains, and recover investments through levies on freight movement. A senior official confirmed that while the government is advocating for PPP models for commercial lines, decisions regarding fares and passenger movement will remain under the Railway Board's control.

The three major economic corridor programmes, focusing on energy (mainly coal), minerals, and cement transportation, are estimated to cost over Rs 5.25 tn by 2031. Additionally, the government is advancing port-rail connectivity under the Sagarmala programme, with several projects currently under development.

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