Railways falls back on direct funding for station redevelopment project as wait gets longer for PPP funds

Instead of PPP, Railways took the decision to return the old Engineering Procurement Construction (EPC) model of execution, the Indian Express said. Under this certain model, it will be the paymaster to be carried out by firms of construction.

0
Railways falls back on direct funding for station redevelopment project as wait gets longer for PPP funds

The government is planning to go back to direct funding of the works to speed up the railway station redevelopment project, instead of waiting for private capital to reach through the PPP (Public-Private Partnership) model.

Instead of PPP, Railways took the decision to return the old Engineering Procurement Construction (EPC) model of execution, the Indian Express said. Under this certain model, it will be the paymaster to be carried out by firms of construction.

Also Read: Indian Railways to discontinue special trains and resume pre-Covid regular services

Zonal Railways will carry out tenders for a total number of 21 stations by mid-December. The designs are finalized by the Ministry of Railway. A set of 30- odd stations is also in the pipeline as said by the sources. Tender documents were expected to have been finalised this week.

The total pricing of the redevelopment exercise would be approximately around Rs 12,000 crore as said by the sources, also adding that unofficially this certain shift is being called “deferred PPP.”

The beginning list of stations where the bid will be out for works includes both big and small stations such as Delhi Cantonment, Ghaziabad, Kanpur, Gandhinagar-Jaipur (suburban), Gaya, Prayagraj, Udaipur, DakaniyaTalav near Kota, Kota, Eranakulam, Madurai, Lucknow (Charbaag), Tirupati and Kollam among others.

With this mode of the project, which is now simplified, the ministry expects the zonal railways to hand over the contracts in several months after finishing the tender formalities. After that, upon depending on the size of the work, 18-30 months would be permitted to the contractors to complete the work.

“We would also be in a better position to push the works in terms of speed and quality,” a senior zonal railway officer said the Indian Express.

This comes close to the first redeveloped railway station in Habibganj (renamed Rani Kamlapati) in Bhopal which is getting done in PPP mode. Prime Minister Narendra Modi inaugurated it on Monday. New Delhi Railway station and the famous Chhatrapati Shivaji Maharaj Terminus will continue to be worked in the PPP way, sources said.

This draws to the conclusion that station development project which is stuck in delays since past 5 years are to a circle. Monitored by the PMO on one of the top infrastructures has toyed with many modes of funding and execution which includes PPP in the past years with little success. There has also been an Empowered Group of Secretaries headed by NITI Aayog CEO Amitabh Kant pushing this project.

The Railways has been deciding for a financial structure to attract the private investors for getting the stations redeveloped without much success. There are apprehensions near around borrowing funds from the market with direct funding and also repaying it. There is some way to recover the cost as well with the User Development Fee.

Summary
Article Name
Railways falls back on direct funding for station redevelopment project as wait gets longer for PPP funds
Description
Instead of PPP, Railways took the decision to return the old Engineering Procurement Construction (EPC) model of execution, the Indian Express said. Under this certain model, it will be the paymaster to be carried out by firms of construction.
Author
Publisher Name
THE POLICY TIMES
Publisher Logo