New Delhi: The Ministry of Railways has prepared an initial list of assets it can monetise with a potential value of Rs 54,344 crore as a way for alternate funding, ThePrint has learnt.
According to sources in the government, in a meeting held with a Group of Secretaries (GoS) last week, the ministry said an initial ‘Asset Monetisation Pipeline’ list comprising private train operator projects, multifunctional complexes, railway colonies and select rail land parcels has been identified for this purpose.
The meeting, which was chaired by NITI Aayog CEO Amitabh Kant, was attended by Railway Board Chairman Suneet Sharma and Secretary, Department of Economic Affairs, Tarun Bajaj, among others.
Asset monetisation refers to the process of extracting the value of investment made in public assets, which have not yielded sufficient returns so far.
The asset monetisation list of the Railways is part of the government’s disinvestment agenda for which a core group of secretaries has shortlisted about 30 projects and assets for monetisation. This was announced by Finance Minister Nirmala Sitharaman in her Budget speech.
In her speech, Sitharaman had said the Railways will go for monetising the Dedicated Freight Corridor assets as part of the government’s plans to recycle operating assets.
Sources said the list of projects identified for monetisation will be submitted to the NITI Aayog by next week. The GoS is learnt to have told the railway ministry to expeditiously take up the projects for monetisation.
ThePrint reached ministry spokesperson D.J. Narain through calls and WhatsApp for a comment on the matter, but there was no response till the publication of this report.
Also read: Railway Budget 2021 — 57% jump in allocation, new vision for 2030, focus on freight corridor
Losses incurred
The bid to monetise railway assets comes at a time when the Indian Railways has incurred losses in revenue from passenger trains to the tune of 87 per cent — down from Rs 53,000 crore in 2019 to just Rs 4,600 crore in 2020 — due to the pandemic.
Earlier this month, a parliamentary panel report had flagged the losses incurred by the Indian Railways passenger services as a result of its social service obligation, and recommended that the national transporter rationalise both freight and passenger fares.
“The predicament of the railways is that the profits earned from freight business are utilised to compensate for the losses incurred on passenger and other coaching services, thereby adversely affecting both freight and passenger business. It, therefore, becomes imperative that both freight and passenger fares are rationalised prudently,” it said.
On railway station redevelopment
According to the sources quoted above, the GoS took stock of the railway station redevelopment projects — a pet project of Prime Minister Narendra Modi — and said they are facing delays.
The GoS is learnt to have told the ministry that while the Request for Qualification (RFQs) from bidders for eight stations were issued in December 2019, the ministry is yet to issue the Request for Proposal (RFPs).
“The railway ministry was told that shortlisted applicants had shown interest about a year ago, and because of these delays, they could lose their interest,” a source said.
“They were also told that the potential bidders can end up deploying their capital elsewhere, and therefore, it is very important for the railways to issue RFPs for these projects at the earliest.”
The Railways told the GoS that these RFPs would be issued in February itself, the sources said.
The ministry was also asked to expedite the RFPs for the two iconic Delhi and Mumbai stations without delay, they added.
Also read: More exclusivity, alternate paths — what Railways could offer to private players to run trains
I hope they monetize the vertical space above railway property like tracks and railway stations. Allow builders to build multi-story buildings over them.