By Seema Sengupta

KOLKATA ― Indian Railways has finally come of age regarding private participation in key areas barring operational aspects.

Shedding all inhibitions the Railway Minister Mamata Banerjee has grabbed international attention by seeking to utilize unused Railway land to create social infrastructure with private participation.

The minister has shown remarkable acumen in presenting a budget for the year 2010 that successfully balances the social obligation of the railways with that of urgent structural reforms.

With the economy registering a consistent 8 percent growth, the need for infrastructure development has become all the more necessary.

Indian Railways operating the second largest rail network on earth under a single management is encouraging a public-private partnership in capacity, enhancing and modernizing to keep pace with the boom in the Indian economy.

The railways in India are considered the lifeline of the nation given the fact that the organization runs nearly 12,000 trains daily of which 11,000 are for passengers.

Carrying 18 million people and 1.5 million tons of freight each day, the railways account for one percent of India's gross national product (GNP).

However, to survive as a successful transportation organization in the face of stiff competition from the surface transport and aviation sectors, the railways need substantive infrastructure enhancement capacity.

Recognizing the urgent requirement of adequate capital and techno-managerial expertise to unbundle its precious resources, the authorities are determined to walk the extra mile.

Accordingly, the budget proposal reflects the honest intention of exploiting the huge land bank for commercial and social development and seeking technological know-how for superior infrastructure.

The minister could perhaps have taken the additional burden of defining a broad policy guideline on public-private partnership model for prospective investors. The railway has been approaching the public-private partnership model of growth on an ad hoc basis.

An unambiguous roadmap on this front involving sound articulation and planning will surely help the railways augment investment to bridge the gap between planning outlays and budgetary support.

With an impressive operating ratio of 92 percent achieved during the last fiscal year, the railways are in a better position to attract a bulk of the required investment of $80 billion to upgrade its infrastructural and operational capability.

Korean firms should be eyeing up a slice of these contracts and the Korea Trade-Investment Promotion Agency (KOTRA) must keep tabs on possible opportunities for business expansion.

Though Indian Railways has been traditionally lethargic in seeking private participation due to political sensitivities, the current strategy to leverage private capital through the public-private partnership model has the nod from the highest political authority.

It would therefore be advisable for the highly professional Korean multinational corporations to have a good look at the budget proposals. The railways are indeed keen on attracting investment and have already taken up some projects to be implemented with private sector assistance.

For example the Indian Railways have liberalized container operations by awarding licenses to private companies and giving them access to booking and distribution.

The Railway Ministry also intends to partner with provincial governments, private logistic operators and infrastructure providers to set up multimodal logistic parks at strategic locations in India.

These parks will be equipped with covered railway sidings, inland container depots, warehouses for goods storage, office infrastructure, highway connectivity and assembly units for processing imported raw materials to make them export ready.

Another important project is the construction of a dedicated freight corridor covering 5,000 kilometers to link the ports and mines of eastern and western India with the rest of the country at an estimated cost of $6 billion.

It will not only ensure multimodal logistic connectivity but also enhance railway freight capacity for handling the anticipated increase in volume at various ports.

A special purpose vehicle is being created for construction of this corridor to be implemented through a mix of engineering procurement and construction as well as a public-private partnership.

Indian Railways is also studying the feasibility of high speed passenger railway link between major metropolitan cities to slash travel time. The fastest train in India presently runs at a maximum speed of 160 kilometers per hour.

The Railway Ministry's master plan, called Vision 2020, envisages the implementation of regional high speed rail projects with a maximum speed of 350 kilometers per hour.

Preliminary studies are being conducted for constructing six elevated corridors connecting commercial, tourist and pilgrimage hubs.

With Japan already offering bullet train technology to India, South Korea's state-run Korail can also be a beneficiary by sharing the indigenous high speed technology with Indian Railways.

Moreover, Korean firms can partner Indian Railways in modernizing major railway stations and improving passenger amenities and other infrastructure.

In tune with South Korean President Lee Myung-bak's eagerness to foster greater economic ties between the two nations, we hope Korean multinational corporations will assist the Indian Railways in its modernization drive.

Seema Sengupta is a journalist based in Kolkata, India. Her articles have been published by The Tribune, The Telegraph, The Pioneer, The Asian Age and other newspapers. She can be reached at seemasengupta@vsnl.net.