Prabhu has innovative plans to raise capital

Railways explores SPV route to fund projects

Prabhu has innovative plans to raise capital

More than a month into the job, Railway Minister Suresh Prabhu has drawn up plan that include innovative ways to raise resources to put the already overburdened transport behemoth back on tracks.

A banker-turned-politician, Prabhu is aware that neither can he increase passenger fares nor tinker with freight charges, a oft-used move to cross-subsidise rail operations.

Monetisation of railway assets and newer ways to maximise revenues from advertisements on trains appear to be top on the minister’s agenda to raise funds for already delayed projects to the tune of Rs 6 lakh crore.

“Another avenue being explored is setting up of special purpose vehicle involving state governments to fund state-specific projects,” Prabhu said in an informal interaction with the media. He added that issuing tax-free bonds was also one of the options to raise resources.

He made a strong pitch for infusing private capital into railways but ruled out privatisation of the transport provider for millions.

“Getting private capital is not harmful to public or to anybody. There should not be any misgivings about it. It is not privatisation,” he said.

Station development, utilisation of advertising space and commercialisation of vacant land are some of the areas which are being explored by the railways for attracting
private investment, besides allowing 100 per cent FDI in the rail sector.

A committee headed by D K Mittal, the former Union Secretary, Financial Services, is expected to submit its report on Tuesday on ways to raise additional funds from non-traditional methods for railways.

The minister is also planning to introduce digital advertisements inside railways to maximise revenue from this stream. A study by RITES has projected annual revenue of Rs 10,000 crore for Railways from digital advertisements.

In a bid to impart transparency in the functioning of Railways, the minister has roped in former Comptroller and Auditor General Vinod Rai. He has been asked to submit a report on ways to improve efficiency of railways.

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