Against the backdrop of key reforms undertaken by Indian Railways over the past year, the World Bank has agreed to be the 'anchor investor' in the country's ambitious Railway Development Fund (RDF) to expand and modernize the railway infrastructure. Disclosing this after meeting with the top leadership of the World Bank Group here over the past couple of days, Railway Minister Suresh Prabhu expressed optimism that the fund would kick in soon, given the unanimity that the railway reforms are in the right direction.
Speaking to Indian journalists based in Washington, the Minister declined to quantify the scale of World Bank's commitment, but indicated that it could well be the largest-ever assistance provided by the Bank to Indian Railways. Separately, Prabhu also took up with US EXIM Bank chairman Fred P. Hochberg the possibility of structuring an India-specific financing model to take advantage of upcoming investment and business opportunities in the rail sector.
Prabhu, who also held meetings with US Secretary of Transportation Anthony Foxx and American business leaders, outlined the Railways' plan to invest $142 billion in the coming five years and double it over the next five-year cycle. On the reforms front, he said 110 measures have been implemented, fulfilling all the announcements made in the Railway Budget of 2015, highlighting the fact that Indian Railways now allows 100 per cent private sector investment in most segments of the railway infrastructure such as suburban rail, metro rail, locomotives and rolling stock, manufacturing and maintenance, signaling and electric works and dedicated freight lines.
At his meetings with officials of the World Bank and its affiliate, International Finance Corporation, the Minister discussed the Railways' efforts to expand, modernize, decentralize decision-making, improve efficiency and meet customer expectations.
He also outlined the push for greater transparency through e-tendering and change attitudes and mindsets. Prabhu discussed with US Transportation Secretary Foxx the possibility of expanding the bilateral engagement in transportation sector following the Memorandum of Cooperation that was signed during his India visit last April.
“Both sides agreed to promote cooperation in a number of areas including railway safety and capacity building, through joint workshops and exchange of visits,” an Indian Embassy release aid. During his interaction at the US India Business Council, Prabhu invited American businesses to invest in the expanding railway infrastructure.
He informed that a draft regulatory framework for transparency in fare and freight pricing, supporting public private partnerships and ensuring efficiency parameters in the rail sector. A wide range of railway projects currently being implemented include a dedicated freight corridor, a high speed train project and doubling/tripling of train tracks in heavy traffic zones, the Minister said. He also touched on the modernization of 400 railway stations, technological up-gradation of signal system, instrumentation and other safety measures.
He stressed that Indian Railways has followed a completely transparent process in awarding the $7 billion contracts to GE and Alstom. He also spoke about the huge investments coming from Japan, which is helping India build its first bullet train with a highly concessional loan.