Tuesday, February 23,
The railways ministry has invited investment proposals from private companies in the country’s power and steel sectors to build tracks connecting coal and iron ore mines with their plants.*, after failing to attract private capital in its earlier attempts.
The move forms part of the ministry’s plan to attract private investment in rail connectivity between mineral-rich areas and industrial belts to support increasing demand for these key raw materials.
“A number of new coal blocks and iron ore mines have been identified for exploitation, but many of them do not have either rail or road connectivity,” a railways official said, adding that the scheme is beneficial for both the railways and private firms.
Called R2CI, the new policy will incentivise developers by offering to return their investment over a period of 10-25 years through a surcharge on freight.
The decision comes just three days before the railway budget and is seen as the ministry’s efforts to improve its image as a department willing to tap private capital to develop railways infrastructure.
“Railways need to be more receptive to the ideas of the industry & end-users so as to encourage the industry to invest in PPP model,” said Vineet Agarwal, executive director of Transport Corporation of India in a note.
Leave a Reply