Railway finances worsen, PPP projects put on hold

New Delhi: Faced with a financial crisis, the Indian Railways has put on hold all public-private partnership (PPP) projects including proposed plants at Kanchrapara in West Bengal and Madhepura and Marhora in Bihar, reports PTI.

Railways have to commit approximately Rs8,000 crore per annum for these three projects-an EMU/coach factory at Kanchrapara, diesel locomotive factory at Marhora and electric locomotive plant at Madhepura-for assured purchase orders.

"In the current situation, the railways is finding it difficult to commit for the assured offtakes," sources in the railway ministry said and added that "due to the fund crunch, railways have put a temporary hold on these PPP projects and have set up a committee to examine how funds can be provided to PPP projects and also to its own production units."

Multinational companies mainly from the USA and Europe are involved in the bidding of these three PPP projects in Kanchrapara, Marhora and Madhepura.

"The committee comprising six senior railway officials is to examine how assured purchase contracts can be provided because railways also have their own production units. If assured offtakes are entertained then there will be very little funds left for its own units," they said.

Railways' annual purchase is estimated at Rs15,000 crore to Rs18,000 crore for wagons, coaches and locos.

"If Rs8000 crore is being kept for the three PPP projects then limited funds will be left for its own production units as well as for purchase of wagons," they said.

The committee has to examine the contradictory demands on railway funds. The committee has been given 15 days time to suggest ways and means to fund PPP projects as well as its own production units.

"So till the committee's report, there is a temporary hold on all these three projects," the sources said.

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