The Vijay Kelkar Committee on public-private partnership (PPP) model has recommended that the Railways go for simple PPP projects such as monetisation of existing station premises or heritage station buildings.
However, the Railways need to provide for an independent regulator. The regulator would have to decide on technical issues such as track access charges for greenfield development of stations.
“The Railways would need to provide for an independent regulator able to adjudicate on technical issues such as track access charges,” said the panel in its report.
The committee suggested the relatively simpler PPP projects be commenced in the Railways to build market credibility. Projects could be brownfield assets such as monetisation of existing station premises (to tap commercial revenue streams through optimal use of available floor space), or heritage station buildings (through frameworks such as ‘adopt-a-monument’).
Greenfield development of stations, maintenance and operations of identified tracks (on a track access charge basis) could also be explored for the PPP model. Earlier, Rail Minister Suresh Prabhu had said the Railways had planned to bring PPP projects under the ambit of the proposed regulator for the rail sector. The idea is to turn around Indian Railways’ unsuccessful experience with PPP projects as part of larger reforms to boost investments through private participation. He had said he would soon approach Parliament with the draft of the regulatory authority Bill seeking a debate on the controversial provision. “The three key elements of the regulator’s functions will be the framework and monitoring of passenger and freight tariffs, PPP and efficiency.” The minister clarified the regulator would not set tariffs, but provide the framework for tariff setting with a view to improving efficiency and giving final approval.
“We’re creating the regulator to tackle the issue of cross-subsidisation. The draft is ready and we will get it passed in Parliament soon,” he had said.