Press Information Bureau

Government of India

Cabinet Committee on Infrastructure

22-November-2012 20:20 IST

The Cabinet Committee on Infrastructure (CCI) has approved a proposal from Ministry of Railways for a policy framework for private participation in rail connectivity and capacity augmentation projects.

The policy contains five models, namely, Non-Government Railway, Joint Venture with equity participation by Railways, capacity augmentation through funding by customers, BOT and BOT annuity. The latter two (BOT and BOT annuity) will follow the existing appraisal and approval procedure laid down by Ministry of Finance through PPP-AC route. Model agreements will be prepared for all these models. First-mile and last-mile and inter-connecting lines for the entire freight commodity basket would be covered under the policy. The policy would provide much-needed impetus to building of critical missing in railway network and evacuation from ports, mines, big industrial units and plants.

The policy framework and the private participation models for rail-connectivity and capacity augmentation projects suggested would facilitate speedy execution of rail connectivity projects. This will give a boost to industrial development of the country and significantly enhance freight traffic of railways.

The policy framework proposed would encourage speedy execution of rail connectivity projects and thereby generate both direct and indirect employment, besides spurring growth of freight - intensive industries. This would contribute to economic growth of the country.

It would also bring out the synergy of public private partnership and help railways in significantly increasing their freight volumes and the industries to benefit from efficient rail transport.

A transparent framework has been suggested so that there is no ambiguity regarding the manner in which projects are to be structured and executed. Zonal railways can be held accountable for results.

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SH/SK

Private participation in rail connectivity enables model-based delivery, standard agreements and clarified approval routes for capacity augmentation. Approval of a policy framework permitting private participation in rail connectivity and capacity augmentation establishes five models-Non Government Railway, Joint Venture with railway equity, customer funded augmentation, BOT and BOT annuity-with model agreements to be prepared. BOT and BOT annuity projects will use existing PPP appraisal and approval procedures. The policy covers first mile, last mile and inter connecting freight lines, mandates transparent project structuring, and assigns zonal railways accountability to facilitate timely execution and increased freight capacity.