How Railways can raise funds for its ambitious projects
Over the next five years, the Railways plan to invest in dedicated freight corridors, high-speed rails and elevated corridors, obtain rolling stock production and to develop logistic parks for facilitating Rail movement. All this requires an investment of about Rs8.5 lakh crore
Recently, while presenting the Railway budget, Minister Suresh Prabhu had indicated that, in the next five years, Railways hope to invest Rs8.5 lakh crore to cover various projects already identified by them.  They expect to generate surplus funds of Rs7,286.46 crore by the end of this month and project this to almost double to Rs14,265.71 crore by the next year.
However, the projects on hand alone would require over Rs2 lakh crore to complete, over the next few years.
It appears the Railway Minister has already some plans and has been discussing the prospects of getting some surplus funds from Life Insurance Corp of India (LIC), whose assets are said to exceed Rs20 lakh crore, and would probably be happy to invest Rs1 lakh crore in the Railway infrastructural projects.  As the world's fourth largest railway network in the world, there ought to be no problem in LIC coming to the aid of Indian Railways.
Over the next five years, it is reported, that the Railways plan to invest in dedicated freight corridors, high speed rails and elevated corridors, like in Mumbai, obtain rolling stock production and in development of logistic parks for facilitating Rail movement.
It may recalled that Minister Prabhu had also referred to the issue of coming out with Railway Tax Free Bonds to raise the needed funds as this will help in the railway development projects. Apart from huge daily passenger traffic, Railways carry millions of tonnes of raw materials like coal, iron ore and others to and from place of manufacture.  
Take for instance, the question of coal movement itself which has the biggest bottleneck of evacuating coal from pitheads to the point of consumption and this has been a perennial problem due to shortage of rakes. Imported coal is also lying in millions of tonnes at ports for the same reason and this gap is likely to widen, as the production of coal increases when the new owners of coal mines take control, after the auction process is complete. Therefore, a new approach is needed to check if this can be successful.
Since the wagon needs are standardised, why not avoid the usual practice of calling for tenders? Can this not be simplified by a rate contract like the Directorate General of Supplies and Disposals (DGS&D)? An estimate of annual needs can be advised to the wagon builders, and they can also plan their raw material needs so that unnecessary processing time for this tendering can be eliminated?
The second issue would be to invite the main buyers of coal, iron ore etc, to be able to "finance" the purchase of these wagons, under the same DGS&D contract, and make it available to miners of these minerals!  One can go one step further, and have these wagons duly identified as "belonging" to this or that company, but with individual colour identification. These rakes must have priority in movement.
The most important aspect is the urgent and imperative need to have a detailed study of the use of railway tracks and employment of a Coal Express by Coal India on these tracks. The tracks are not in use all the time, and without disturbance of other rail movement, all these cargo trains can have priority in movement.
In the meantime, the Parliament is already considering the declaration of rivers to be converted into "national waterways" and this will reduce the stress on Railways for the time being in those sectors that are used for coal or other raw material movement.
Finally, for special freight corridors, Railways can also seek funding from main users, so that these can be developed without further delays.  If exclusive corridors or tracks are required, why not the Railways permit the consumer (buyer) to "adopt" this as a project and meet its costs?
Minister Suresh Prabhu may have similar ideas to generate funds and one may expect some interesting announcements in the near future.  
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
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