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Acknowledging that Railways is in ‘trouble’, Union Minister Suresh Prabhu on Thursday said public-private-partnership policy must change to attract investment for capacity building.
"Honestly, I am telling you Railways is in trouble and we have to find a solution which is completely suitable to Railways.
“We cannot find a political solution to economic problems. Railways problem is that we need to create capacity, that is the only way," Prabhu said at a press conference at Confederation of Indian Industry.
"How will Railways become sustainable?
“Only when Railways starts making enough resources which are necessary to maintain itself as well as to put money into the future generation.
“Now what are the sources possible. Anywhere in the world, Railways are largely supported by the governments".
The minister said that there is need to make policy changes to attract investment for capacity building under the PPP mode.
"Many of the PPPs have not evinced interest.
“That has happened for a simple reason that the PPP policy that we have in place is not right.
Budget 2015: Complete Coverage
“There is no regulatory system in place that whenever there is any dispute between the Railways and the private party it cannot get addressed properly," the minister said.
"There is a huge amount of interest in the Railways. We have to make policy changes," he added.
Indian Railways will borrow Rs 17,655 crore (Rs 176.55 billion) from markets through its two companies IRFC and Rail Vikas Nigam Ltd for capital expenditure during 2015-16, a nearly 47 per cent increase over the current fiscal year's revised estimate.
"To expect Finance Ministry can fund my projects is a good idea but it will not happen. We must create infrastructure for borrowings. Unless we do that, we are stuck in a vicious cycle," the minister said.
The market borrowing as per the revised estimate by these two companies during the current fiscal was pegged at Rs 12,045 crore (Rs 120.45 billion) from markets, according to the Railway Budget for 2015-16, which was tabled by Railway Minister Suresh Prabhu in Parliament on Thursday.
Prabhu did not hike passenger fares or announce new trains in the budget.
"This time we had decided that we will not announce new trains in the Budget because we should be focussed on important issues," he said.
The minister hiked the freight rate for cement, coal, others by up to 10 per cent; while envisaging investment of Rs 8.50 lakh crore (Rs 8.5 trillion) in five years and proposed 77 new projects covering 9,400 km of doubling works, among others.
Besides, he announced a slew of measures for passengers, including buttons and coin vending machines for railway tickets, e-catering to select meals from an array of choices,
24X7 helpline for passenger security issues and surveillance cameras in suburban coaches for women safety.
