Railways opens 10 production areas for FDI infusion

Govt looks to modify extent of FDI policy

 Contrary to the assertion of the government that the Railways is opening up only some areas like bullet trains and dedicated freight corridors to domestic and foreign private investment, the national transporter has proposed to open up almost 10 important areas of rail production.

These include production of rolling stock, electrification, signalling systems, freight terminals, passenger terminals and Mass Rapid Transport System (MRTS).

The Railways, which has till now been completely insulated from private investment, including FDI since Independence, has been given approval for 100 per cent FDI in infrastructural projects.

For this, the government will have to amend Schedule-1 of the Industries (Development and Regulation) Act of 1951. The Act, which has been amended from time to time, has reserved rail transport and atomic energy for the public sector.

PPP projects

Areas which the Railways has proposed to be taken out of the prohibited list for private investments under Schedule-1 of Industrial Act 1951 include construction, operation and maintenance of suburban corridor projects through PPP, high-speed train projects, dedicated freight lines, rolling stock, including train-sets and locomotive /coaches manufacturing and maintenance facilities.

It also includes electrification, signalling systems, freight terminals, passenger terminals, infrastructure in industrial parks pertaining to railway lines/ sidings, including electrified railway lines, and connectivity to main railway lines and MRTS.

Common facilities

The note, which the Railways had sent to the cabinet recently, said, “As per the policy, FDI is prohibited in Railway transport (other than MRTS) as the sector is not open for private sector investment. Also, the existing FDI policy does not mention construction of rail sidings in the definition of infrastructure and common facilities to be created for any industrial park.”

“The cabinet note proposes to modify the extent of the FDI policy and Schedule-1 of the Industries Act 1951,” it added, suggesting that modifications, accordingly, would not only open up some areas for greater investments, but also encompass most important areas except railway operations.