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Updated: July 22, 2013 00:49 IST

Private investments must to develop railways: HMR chief

Special Correspondent
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N.V.S. Reddy
N.V.S. Reddy

Funds are required for new rail lines, world-class stations, dedicated freight corridors and high speed rail lines so that the rail capacity is augmented throughout the country, says N.V.S. Reddy

Unless large-scale private investments are not encouraged through the private sector under the PPP mode into the railway sector, the long waiting lists of passengers would not disappear. Funds from non-traditional financing mechanisms are required for new rail lines, world-class railway stations, dedicated freight corridors and high speed rail lines , said Hyderabad Metro Rail Managing Director N.V.S. Reddy.

Participating in a workshop organised by the Union Finance Ministry in Railway Bhawan, New Delhi, on “Financing of PPP Projects” on Saturday, Mr. Reddy explained that the country is losing about Rs.6 crore due to high logistics costs in India.

Citing the successful experience of telecom, airways, ports, national highways, etc., where long waiting lists for goods and services were eliminated by opening up these sectors for private sector investments, Mr. Reddy affirmed that it was imperative to bridge the widening demand-supply gap in train services.

Sharing his experience in shaping the Hyderabad Metro Rail project , he said that projects of this kind need a dedicated and highly motivated team of officers in government.

Bold decisions, developing innovative mechanisms and devising strategies to overcome the innumerable procedural hurdles and booby traps laid by vested interests are necessary. Besides, the government head of a PPP project would have to be a good communicator and a marketing strategist to successfully market the project, he added.

The MD said that the HMR project was once given up by many as a “jinxed project”. But it was successfully turned around through sheer perseverance, patience, dedicated efforts, socially useful activities and a communication strategy.

Joint Secretary, Ministry of Finance, Sharmila Chavaly,

Arjun Rakshit, Additional Member (Finance), Railway Board and Abhilasha Mahapatra, OSD, Department of Economic Affairs also addressed the workshop.

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HMR is still a 'jinxed' project, for the people. Its amazing that a
government official speaking in favour of privatisation, without any
experience in running any logistical services. HMR is still a
passenger line, and has no experience either in passenger transport,
or goods transport. This PPP mode was the same argument used in power
projects and airport projects. However, experience shows that private
players in public projects benefit, not from the business or service
delivery, but from artificial inflating of costs, cutting corners,
gaining government largesse in the form of cheap lands, tax breaks,
and concessions.

from:  Narasimha Reddy
Posted on: Jul 22, 2013 at 15:36 IST
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