Opportunities for investment in Indian railways
Dedicated Freight Corridors (DFC)

Railways have decided to take up the construction of two routes of Dedicated Freight Corridors in phase-I. The first will connect Mumbai in West to Delhi in the North. The second will link Ludhiana in the North to the Kolkata area in the East. This would involve construction of over 2700 route kilometers at a cost of around US$ 6.5 billion. Planning for these corridors is in advanced stages.
Railways are also simultaneously carrying out feasibility studies for four other freight corridors comprising of about 8000 route kilometers. These freight corridors are planned to carry high-axle loads of 25 and 30 tonnes and also heavier trailing loads. Dedicated freight corridors would lead to separation of the freight and passenger operations on the busiest trunk routes of IR.
The project would offer substantial opportunities for PPP for track construction/ maintenance, electrification, signaling and rolling stock for dedicated Freight Corridor could be entirely met through PPP or leasing.

World class Railway station
IR are also taking up the work of redevelopment and modernization of stations at important cities. 19 stations have been identified for development through the PPP route by leveraging the real-estate potential. It is envisaged that most of the large stations would entail investments in the region of US$ 500 million each.

Manufacturing facilities for locomotives/coaches/other railway equipment
IR require around 4500 passenger cars and 700 locomotives per annum to meet our future traffic needs. the in-house capacity for manufacture is around 2500 cars and 350 locomotives per annum. This gap needs to be bridged. There is also a need to upgrade technology. IR is studying the possibilities of PPP. IR is prepared to give long-term demand guarantee to encourage prospective manufacturers to set up rolling stock units in the country. IR hope to initiate the bidding process by July this year and expect to mobilize investments of about US$ 1.5 billion in this area.
At present, IR  procure 10,000 freight cars annually. These are procured from the wagon building industry, mostly in the private sector. The designs are provided by RDSO, IR certification and inspection agency. IR plan for the future is to go in for wagons with higher pay-load to tare-ratio. IR have recently liberalized the existing provision to allow private wagon suppliers to bring their designs and get these approved by RDSO.

 High-speed Rail Corridors
IR  have decided to carry out pre-feasibility studies for four High-speed Passenger Corridors covering distance of about 2800 kilometers. The corridors having potential of traffic will be managed through PPP route.

 Operation of Container Trains
Operation of rail-borne container services has been opened to private operations in the year 2006. 15 firms have been licensed for the business. The scheme is now open for other intending firms to apply.

 Indian Railway Catering and Tourism Corporation (IRCTC) and Rail Land Development Authority (RLDA)
IR have formed a separate company named Indian Railway Catering and Tourism Corporation (IRCTC) to execute PPP initiatives in hospitality tourism and catering. IRCTC is in the process of developing a chain of 100 budget hotels through PPP. Licenses for 20 hotels have already been awarded.

 Inland Container Depots (ICDs

Construction of Inland Container Depots (ICDs), rail side warehouses and procurement/ lease-out wagons are a few other areas where we are seeking private investment.

Modern signaling and track maintenance equipments
To cope with growth, IR would require modern signaling and track maintenance equipments. IR plan to spend about US$ 3 billion on these equipments in the next five years. A number of suburban projects are under implementation. Mumbai Urban Transport Programme Phase-II alone would require 96 EMU train-sets-valued at over US$ 500 million over the next five years. These areas will be open for private participation.

Indian Railway Finance Corporation (IRFC)
Indian Railway Finance Corporation (IRFC) is the financing arm of Indian Railways. IRFC enjoys BBB (Stable) rating from reputed International Rating Agencies. It has been raising finances in both domestic and International markets at highly competitive rates. Some of the recent transactions of IRFC include a U.S.. private placement issue to raise US$ 125 million at 5.94% and a Samurai bond deal in Japan for an equal amount. Indian Railways would welcome innovative credit enhancement products suited for our projects having long gestation periods. We would like to work with multilateral and bilateral agencies for this purpose.
Source: 40th Annual Meeting of Board of Governors, Asian Development Bank Kyoto, Japan, Address by Mr J P Batra, Chairman, Railway Board, Government of India