The Indian Railways is optimistic about getting investment to the tune of Rs 8.56 lakh crore in the next five years from pension funds and multilateral development banks.
Railway Minister Suresh Prabhu said on Thursday that these banks should involve in funding development activities involving the rail industry.
The proposed investment plan include Rs 1.99 lakh crore for network decongestion, Rs 1.93 lakh crore for network expansion, Rs 1.27 lakh crore for safety and Rs 1.02 lakh crore for rolling stock.
Presenting the Railway Budget in Lok Sabha, Prabhu looked at options beyond budgetary support for funding its activities.
Budgetary support is the “quickest and easiest option” to finance the plan but the Finance Ministry also “faces challenges of competing demands” although a small initial contribution to Railways can be catalytic, he said.
“But the scale of our investment needs is such that it will require us to seek multiple sources of funding. We will tap other sources of finance.
Multilateral development banks and pension funds have expressed keen interest in financing new investments,” he said.
“Their time horizon is aligned with ours. They seek sources of predictable and recurring revenue, which we can provide through the issuance of long-term debt instruments to fund revenue generating railway projects,” he added.
Prabhu also said he would revamp the existing Public-Private-Partnership (PPP) cell in the Ministry to make it more result oriented.
“PPP will help in creating more jobs in the economy besides augmenting capital for improving Railways,” the minister said.
The ministry, which has a “big shelf of projects”, will also use the expertise of Railways PSUs by leveraging their balance sheets to expedite the completion of identified projects within specified timelines and to undertake a higher volume of activities.
Acknowledging that resources are “limited”, he announced the setting up of a working group to modify the present system of accounting to ensure tracking of expenditure to desired outcomes.
“We are also proposing to expand paperless working in our material management system. In line with focus on ease of doing business, we will digitally integrate our vendors through Vendor Interface Management System to provide single window interface to vendors,” Prabhu said.
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