Vision 2020 - Transportation Research Group of India

CHAPTER-VII
Government of India
Ministry of Railways
(Railway Board)
Resource Requirement and Mobilization
A high-growth strategy would require massive investments in capacity creation, network expansion and
upgradation. Annexure-II shows a list of capacity enhancement and railway modernization works and a
very rough assessment of the investment programme needed to support the achievement of the goals of
the Vision. Tentatively, it has been estimated that around Rs. 14,00,000 crore over the next 10 years (i.e.
up to the year 2020). Of this, most of the investment for world-class stations and high speed corridors
could be mobilized through Public-Private Partnerships. A sizeable part of the investment required for port
connectivity projects, setting up of electric/diesel locomotive manufacturing units and new coach
manufacturing units could also be mobilized through private sector participation by SPV or Joint Venture
(JV) route. Metropolitan Transport Projects and some of the new line projects could be taken up with
partnerships with the state governments. Public Private Partnerships could also be used in setting up of
private freight terminals, logistics parks, wagon investment schemes and licensing of freight service
operators who would bring in specialized rolling stock and new terminals. Railways can also borrow within
prudent limits through IRFC.
7.1 Availability of internally generated surpluses is expected to go up with 10% annual growth in freight and
passenger traffic. It has been tentatively assessed that Railways would be able to generate about 64% of
the investment required over the period through internal generation and extra budgetary resources. This
implies that the gap of 36% or Rs.5,00,000 Crore would need to be bridged by Gross Budgetary Support
(GBS) from the Central Government. In other words, on an average, budgetary support for the
programme to implement the Vision 2020 would need to be at a level of around Rs. 50,000 crore per
annum.
Attainment of the goals in Vision would require a categorical commitment on the part of Government to
ear-mark and ensure a steady-flow of financial support to the programme. This should be ideally in the
form of an Accelerated Railway Development Fund (ARDF) with budgetary commitment to the tune of
approximately, 5,00,000 crore spread over next 10 years. An amount of roughly Rs. 1,00,000 crore of
the ADRF could be set aside to clear the pending backlog of socially desirable New Lines and Gauge
Conversion projects as a one-time outright grant.
7.2 Budgetary disbursement from the ARDF needs to be front-loaded as a high-growth strategy would
necessitate investment in capacity augmentation immediately while the take-off to high-growth and
consequently, generation of internal surplus could take at least three years to materialize. During this
period, the impact of the implementation of 6th Pay Commission would be fully absorbed and preparatory
work to develop and bid out big-scale PPP projects would have been completed to allow a gradual
phasing down of the budgetary contribution.
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