Indian Railways plans to invest $ 142 billion in five years and hope to double this investment figure in the next five-year cycle, said Railway Minister Suresh Prabhu, during his recently concluded three-day visit to Washington DC, USA. Since the last Railway Budget of 2015, the Indian Railway has implemented 110 reform measures, which includes permission for 100 percent private sector investment in most segments of the railway infrastructure such as suburban rail, metro rail, locomotives and rolling stock, manufacturing and maintenance, signalling and electric works and dedicated freight lines.
During his US trip, Minister held meetings with various financial institutions such as World Bank, IFC, etc to explore ways for raising funds for Indian Railways’ ambitious expansion and modernisation projects. Prabhu discussed the Indian Railways’ efforts to expand, modernise, decentralise decision making, improve efficiency, meet customer expectations, move to clean energy, introduce greater transparency through e-tendering and change attitudes and mind sets. Both the World Bank and IFC are working closely with Indian Railways to help it achieve its formidable targets, said a Railway Ministry press release.
In his meeting with the chairman and president of the US EXIM Bank Fred Hochberg, Suresh Prabhu discussed the possibility of structuring an India specific financing model to take advantage of upcoming investment and business opportunities in India’s rail sector. Both sides agreed to work on a road show of potential long-term investors having interest in India’s infrastructure sector. Prabhu also met with Elizabeth Littlefield, president and CEO of the Overseas Private Investment Corporation (OPIC), to explore the possibility of OPIC’s financing for the Indian Railways.
Urging US companies to invest in India’s railway sector as it offer huge business opportunities, Prabhu said, “The Indian Railways has prepared a draft regulatory framework for transparency in fare and freight pricing, supporting public private partnerships and ensuring efficiency parameters in India’s railway sector. Various projects are at different stages of implementation which include dedicated freight corridor, high speed train project, doubling/tripling train tracks in heavy traffic zones, modernisation of 400 railway stations, technological up-gradation of signal system, instrumentation and other safety measures.”
In fact, Indian Railways awarded a $ 7 billion contracts to GE and Alstom in November last year. Huge investments are also coming from countries such as Japan, which is helping India build its first bullet train with a highly concessional loan. Prabhu encouraged US businesses to take advantage of the emerging opportunities.
The Indian Railways has also embarked on transforming its energy mix by using renewal energy sources like solar and wind energy, and is undertaking energy audits to improve efficiency to meet its sustainability targets. “Indian Railways drive to transform its energy mix by promoting the use of clean energy and various initiatives will make railways an eco-friendly organisation. Energy audits, use of LED lights, water recycling and other measures are not only protecting the environment but also saving the government millions of dollars,” said Suresh Prabhu during an interaction with the senior leadership of the World Resource Institute (WRI).
According to the Minister, any sustainable transport solution has to be economically viable, socially equitable and environment friendly.