No private investors for PPP projects

Published: 27th February 2013 10:28 AM  |   Last Updated: 27th February 2013 10:28 AM   |  A+A-

Though the Railway Ministry has been making a reference to the projects that have been proposed to be taken up on Public Private Partnership (PPP) mode it has not specified the modalities for private participation. Therefore, not even a single private investor has come forward to invest.

The state had sent proposals to take up a few projects on PPP mode to enhance rail connectivity and had offered to give the land required. After examining the proposals, the Railway Board had approved Bijapur-Sahabad, Talguppa-Honnavara and Dharwad-Belgaum lines and these projects were announced in the 2010-11 Budget. The railways and the state entrusted these projects to Rail Vikas Nigam Limited (RVNL), a special purpose vehicle floated to implement projects taken up on PPP mode.  The RVNL conducted a feasibility study for these projects and, subsequently, got a bankability study done through private consultants to invite expression of interests from private parties to invest.

In their report, the consultants had said these projects would not be economically viable unless a large sum of money was invested and the railways came up with a plan for assured returns to private investors.

As the railways could not formulate a modality that would attract private investors, the RVNL could not invite expressions of interest from private investors.

Yet, the PPP projects find a mention in every Railway Budget. Recently, the railway minister had invited states to invest in PPP projects as no private investor was coming forward.

The Associated Chambers of Commerce and Industry of India Karnataka co-chairman J Crasta said, “Three years have elapsed since the Railway Board mooted the idea of implementing projects on PPP mode... Yet, it has not come up with an investment module. In India, only the railways is authorised to construct projects and to regulate and monitor the movement of trains and tracks. How can a private investor invest without having any control over his investment or secured returns for his investment?”

Stay up to date on all the latest Karnataka news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp