Title - Railway PPPs 'frustrated' due to delay in land use approvals from cabinet

The Ministry of railways has told parliament that it has not been able to raise funds from public private partnerships in 2011-12 because of delays in cabinet approvals regarding the use of railway land.

There was a shortfall of Rs 31,150 crore in the 'extra budgetary resources' (EBR) raised by the railways between 2007-12 mainly due to lack of PPPs taking off.

While the reasons for the failure of PPPs in the railways has a number of causes laid out in the parliamentary committee report, the chairman railway board told the members of the parliament on the committee last month that, "for the last almost 11 months now, from April till now, our efforts to garner resources through PPP have been frustrated to a large extent because of the land issue..."

He went on to state that, "We are waiting for Cabinet approval for our land use. That is the single factor which is coming in the way and that has dogged us for the entire year."

According to the submissions made by the rail ministry to parliament, the cabinet secretariat had asked all ministries in march last year to seek specific approval of the cabinet for each case of sale or land long term lease of land belonging to government or government-controlled statutory authorities.

"Pursuant to these directions, all the proposals for raising resources through PPP projects leveraging commercial potential of Railway land came to a standstill," the parliamentary report says.

The cabinet secretariat had told ministries that approvals from the cabinet in such cases was required pending the formulation of a policy regarding the transfer or alienation of land by government or statutory authorities.

The rail ministry told MPs that following the diktat from the cabinet secretariat, a subsequent decision was taken to obtain 'generic' approval from the cabinet regarding rail land use. However, a year later, a cabinet note on the issue is still winding its way through the bureaucracy.

Other reasons cited by the report for the failure of railway PPPs to take off during the 11 thplan (2007-12) include the delay in approvals from state governments required for the bidding out of world class station projects, land acquisition delays, and delays in the finalisation of bidding and contract documents in the case of locomotive factory projects in Madhepura and Marhowra.

The rail ministry has also told MPs that "PPP in railway sector is intrinsically difficult due to long gestation period and relatively low returns."