Friday August 11, 01:44 PM
Lalu derails private operators entry
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By Surabhi
Railway ministry has refused to give up its monopoly in the sector and has decided not to allow the entry of private train operators in the proposed dedicated freight corridors. The ministry has made a strong pitch for the same in the group of ministers (GoM) which met on Wednesday. The ministry had initially proposed the concept of freight corridors to the finance ministry as a means of allowing private players in the sector. Sources said this was the reason why the GoM did not decide to appoint a tariff regulatory authority for the ambitious Rs 40,000 crore- project. The government may soon appoint a foreign consultant to formulate a policy for fixation of access charges for the project. The GoM resolved to draw up a concession agreement for the special purpose vehicle (SPV) for implementation of the mega project, whose cost might even go up to over Rs 1 lakh crore with the addition of more segments. The railway ministry will finalise the agreement in consultation with the finance ministry and the planning commission. The agreement would address the issue of fixing track access charges, sources said. The move to appoint a foreign consultant is prompted by the fact that determination of access charges for such corridors is an unexplored territory in the country. A consensus on the tricky issue of the structure and mode of implementation of the SPV has also been worked out. While railway ministry has got its way in so far as ownership of the SPV goes, it is the finance ministry's concept of funding and equity of the SPV that has been agreed upon. A Rail Bhawan official said, "The SPV for the freight corridor will be a public sector undertaking with an initial 100% stake of the railways, so that work on the corridors can be started initially." He added, "The ministry wants to start the execution of the corridors soon. So railways will carry out work in the crucial areas through the EPC mode. However, the private partnership route would be the predominant mode of implementation." The critical routes have not been identified as such, but there will be sections that could be bottlenecks or witness heavy flow of passenger and freight trains. The SPV will have a paid-up capital of Rs 50 crore and would be authorised to enhance its equity to Rs 4,000 crore. However, it is not clear who will provide the funds. The funds may come from the railway revenue, but it is more likely that at least part of it would be funded by the Centre. It would be headed by the chairman railway board. There would be four full-time board directors, who will be chosen from the railway services as well as two government-nominated directors, one each from the finance and the railway ministries. In addition, there will be three part-time directors. Work on the freight corridor should begin once the Cabinet approves this new formula. Rail Bhawan wants to complete the project within five to six years.
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