Railways want to woo industries, wary of land acquisitions

The UPA government will steer clear of land acquisition for the Public Private Partnership (PPP) railway projects, even as it prepares a ground to woo industries. In his budget speech, railway minister Pawan Kumar Bansal had set the target of attracting Rs 1 lakh crore private investments through the PPP mode. Saubhadra Chatterji reports.

The UPA government will steer clear of land acquisition for the Public Private Partnership (PPP) railway projects, even as it prepares a ground to woo industries.

In his budget speech, railway minister Pawan Kumar Bansal had set the target of attracting Rs 1 lakh crore private investments through the PPP mode. Now, his ministry is ready with first-ever model agreement of the railways - a private rail system based on the earlier policy to attract investments.

The private rail system will allow an industry to build its own rail line to link its factory or mines to an existing rail way network.

The agreement places the onus of buying land and setting up the rail network on the industries while Indian Railways will run the service using its own locomotives, wagons and employees.

Hoping for a win-win situation for both sides, the railways also proposes to pay the user development fee to the private party and in case of an accident due to its fault, the ministry will bear the compensation.

The model agreement, submitted to the rail ministry brass on April 12, however, offers time-bound review of industry proposals and completion certificates and help to get clearances from government quarters.

"The developer shall not be obliged to await the observations of zonal railway on projects report beyond the said period," the agreement says.

Sources in the railway ministry told HT that it would come up with four more model agreements to cater to other types of PPP projects.