Railways Will Form New Zone for Andhra Pradesh: Gowda

Railways is coming out with a model concession agreement (MCA) in a month for executing its projects under public-private partnership mode

Published: 20th September 2014 06:22 AM  |   Last Updated: 20th September 2014 08:07 AM   |  A+A-


HYDERABAD: Union railway minister DV Sadananda Gowda has said that the railways will go ahead with creation of new railway zone in Andhra Pradesh. The Indian Railways has constituted a committee to examine the issue as proposed in the AP Reorganisation Act-2014, in the aftermath of the bifurcation of the state. The committee is expected to submit its report before October 14. 

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‘’I am waiting for the report. Soon after receiving the report, we will move ahead with the creation of new railway zone. Certainly newly-formed states will be given priority and preferences,’’ Gowda said. 

Addressing a press conference here on Friday after a review meeting with South Central Railway (SCR) officials, Gowda said that the Indian Railways is coming out with a model concession agreement (MCA) for executing its projects under public-private-partnership (PPP) mode.  The model concession agreement which is getting ready would come out within a month and it is a framework of contract that sets the terms for incentives and targets for the private players, the minister said.

On foreign direct investment in the railways, Gowda reiterated, ‘’We will not entertain FDI in the operating part. We will allow FDI only for creation of infrastructure and other developmental activities. Certainly, there will be no FDI in existing sector.’’ Gowda said that Railway would seek FDI only for operation of high speed rail and dedicated freight corridors and said several countries, including China, Japan and other countries have come forward to invest in infrastructure for the railways. ‘’We have signed an MoU with China for the Mysore-Bangalore-Chennai high-speed train corridor,’’ he said. The minister said, “private sector players are coming in large way. We want to take railways to newer heights, without (private) investment it may not be possible for us at present.”

Due to scarcity of funds, we did not announce any new projects in the Railway Budget. Whatever projects were announced by the previous government we are trying to complete them in a phased manner, he said.

When asked about the drop of passenger traffic, the minister said decline in passenger traffic is around two percent, not because of price hike but due to different reasons.

Withdrawal of ‘Izzat Pass’ is one of the reasons. Passenger traffic will increase in the coming months as festivals are lined up. Gowda directed the SCR officials to focus on ensuring the earnings target are met. He also stressed on the need to complete the  rail projects at the earliest.


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