Railway Minister Suresh Prabhu said on Thursday that the organisation could not depend on budgetary resources alone to fund expansion and stressed the need for tapping external funds.
Some agencies had already made commitments for the current year, he said.
His maiden budget proposed an investment of Rs. 8,50,000 crore in the next five years. While the budget did not offer any clues to where the money would come from, Mr. Prabhu highlighted some of the means of sourcing funds.
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“For creating infrastructure, we cannot just depend on only one source: gross budgetary support. The Finance Minister also raises money from the market… Why cannot we do the same thing?” .
'Money is not a great issue'
Railway Minister Suresh Prabhu said a public sector undertaking with a net worth of Rs. 15,000 crore could be leveraged 3-4 times for undertaking projects on a commercial basis.
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“The amount we can get through such an exercise could be even more than what we can expect from gross budgetary support.”
He said a large government-owned institution had already committed Rs. 20,000 crore for the current year. Another had committed Rs. 10,000 crore. However, he did not name the institutions.
“We are talking to the World Bank, the Asian Development Bank and the International Finance Corporation; all of them are aligned to our internal priorities. So, money is not a great issue,” he said.
In his budget speech, he spoke about pension funds showing interest in investing in railway projects. He also announced a plan to create an independent finance cell on the Railway Board to mull over ways of raising funds.
Relying on the single source, the gross budgetary support, and if it does not come then the Railways has to restrict its expansion plans. “That is why railways have suffered. We could not invest in capacity addition.”
Mr. Prabhu also acknowledged the problems in public-private partnership and proposed a mechanism to redress grievances.