Indian Railways, which is facing a severe cash crunch to the tune of Rs 30,000 crore every year, received a major financial boost as 100% Foreign Direct Investment (FDI) is now allowed for developing infrastructure and improving safety features. The Railway Board and a Cabinet Panel has identified 17 key areas where this FDI can be used.
Ever since its origin, Indian Railways had always been shut off from receiving any kind of FDI, considering security risks involved. But in August this year, cabinet cleared FDI provision in the Indian Railways, and yesterday, the important areas were finally identified and notified to the general public.
It is expected that these new guidelines can attract upto Rs 90,000 crore FDI into Indian Railways.
Among others suggestions, proposal to build Bio-toilets in passenger coaches and mechanized / automated laundry system at every station are the ones which are getting huge attention, as the plans were in the pipeline since ages, but due to lack to funds the plans were never implemented.
17 key areas of Indian Railways where 100% FDI will be allowed
- Installation and maintenance of Bio-toilets in passenger coaches
- Technological solutions for manned and unmanned level crossings (Construction and maintenance of ROB/RUB /Limited Height Subway)
- Technological solutions to improve safety and reduce accidents (Installation and maintenance of Asset failure detection systems (Track/ OHE/ Rolling Stock/Signaling etc.)
- High Speed Train Projects: Projects involving those trains which will run above 250 Km/hr speed; and will have no connection or link with any existing railway line or route. The designer will have complete freedom to exercise his creativity and ideas; Government will also chip in with resources and money.)
- Mechanized laundry (land will be leased by Ministry of Railways at Re 1 / annum)
- Producing non-conventional energy from sources such as solar, tidal, wind etc with open market tender being offered.
- Rolling stock procurement
- Concessioning of standalone passenger corridors (branch lines, hill railways etc). (renovation of these lines, optimizing them for better commercial usage)
- Testing facilities and world class laboratories for experimenting new technology
- Setting up Railway Technical Training Institutes
- Construction of world class passenger terminals and renovation/maintenance of existing stations
- Creation of Freight terminals/ Logistics Parks in strategically important locations
- Signaling system – Construction of new facilities to develop advanced systems and renovating/maintaining existing systems
- Railway Electrification
- Rolling stock including train sets and locomotives or coach manufacturing and maintenance facilities.
- Dedicated freight lines on a Joint Venture and/or PPP model, with clear revenue sharing guidelines (Private Trains on certain lines will also be allowed from now on..)
- Suburban corridor projects through PPP: All new suburban corridor projects are permissible when launched through PPP route by MoR. The developer can construct, maintain and operate the corridor within the concession period.
The Railway Board has outlined a series of ‘terms and conditions’ which apply in this unique 100% FDI route, such as in those projects which are situated near border areas, FDI beyond 49% will be brought before the cabinet panel for due approval; safety clearance and audit are required for projects involving public carriage of passenger and more.
You can access the guidelines, conditions and more details about the 17 key areas right here.
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[…] that Indian Railways has finally given approval to FDI in Railways infrastructure projects, and highlighted the 17 key areas where such investments can be made by foreign investors and the underlying guidelines. Locomotive […]
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