Indian Economy, TLP-UPSC Mains Answer Writing
Q. 2. “Public-Private Partnerships (PPP) have been promoted as a viable model to modernize Indian Railways.” Evaluate the potential and limitations of PPP in railway station redevelopment and infrastructure upgradation. (150 words, 10 marks)
Introduction
Indian Railways, the fourth-largest railway network globally, serves over 8 billion passengers annually. With rising capacity constraints and modernisation needs, PPP has emerged as a vital model to infuse private capital, technology, and operational efficiency.
Body
Potential of PPP in Railways
- Resource Mobilisation: PPP reduces the financial burden on Indian Railways, which needs over ₹50 lakh crore in investments by 2030 (NRP Vision 2030).
- Operational Efficiency: Private partners bring advanced tech, timely project delivery, and better asset utilisation.
- Station Redevelopment: Projects like Habibganj and Gandhinagar stations showcase world class designs and better commuter experience.
- Modernisation of Infrastructure: PPP is being used in high-speed corridors (Mumbai– Ahmedabad bullet train), and private freight terminals.
Limitations of PPP Model
- Lack of Bankable Projects: Private investors find limited commercial viability in smaller stations with low footfall.
- Land and Clearances: Delays due to unclear land titles and cumbersome approval processes hinder PPP rollout.
- Revenue Model Challenges: Monetisation from real estate or commercial activities often falls short, making ROI unattractive.
- Past Project Failures: BOT station redevelopment attempts under 2009 policy saw poor response and minimal execution.
- Risk Aversion: Long gestation periods and regulatory uncertainty dissuade serious private players.
Recent Policy Interventions
- Station Redevelopment Policy 2020: Shifts to EPC + O&M model with assured returns and transparent bidding norms.
- Railways Infrastructure for Future Initiative: Budget 2023 allocated ₹2.4 lakh crore, with PPP in capex-heavy areas like rolling stock, terminals.
- Asset Monetisation Pipeline: Railways identified 400+ stations and land parcels under NMP to attract private investment.
- Gati Shakti and PM Gati Shakti Cargo Terminals: Integrated logistics with private participation and faster clearances.
Way Forward
- Streamline Approval Process: Create a single-window clearance mechanism with fixed timelines.
- Ensure Viable Revenue Models: Provide long-term leases and allow dynamic pricing and real estate monetisation.
- Risk Sharing and Policy Clarity: As advised by the Kelkar Committee (2015), adopt balanced risk allocation and restructuring of Railways to separate policy, operations, and regulation.
- Capacity Building in Railways: Train officials in PPP appraisal, monitoring, and stakeholder engagement.
- Strengthen Accountability and Regulatory Oversight: Establish independent dispute resolution and performance review bodies.
Conclusion
Guided by the Bibek Debroy Committee’s reform vision, PPPs can make Indian Railways future ready by integrating private capital with public planning to deliver efficient, modern, and commuter-friendly infrastructure aligned with national growth priorities.
