NEW DELHI: The World Bank will help draw up a granular makeover blueprint for the Indian Railways, which is investing Rs 5 lakh crore to transform itself from a colonial-era mass transporter into a strategic platform underpinning growth in Asia’s third-biggest economy.
The multilateral lending agency would partner the 164-year-old railroad network, the world’s fourth longest, to help the state transporter with investment and planning, digitisation and technology development, besides establishing a Railway University and the Rail Tariff Authority.
The bank, which has earlier worked with the Railways for financing the Eastern Dedicated Freight Corridor Project, will provide advisory services and programme management consultancy for this transformation exercise for 2-3 years.
“We needed this arrangement to build our capacity and deliver projects on a mission mode. World Bank’s expertise would be a great gain,” a top rail ministry official said.
Rail minister Suresh Prabhu has drawn up an ambitious plan to transform Railways with an investment of Rs 5 lakh crore in the next four years. For this year, the Railways would spend Rs 1.31 lakh crore to augment capacity.
On the planning front, the World Bank has proposed to set up an organisation for creating detailed forecasting models, traffic optimization and planning.
LONG-TERM INFRA PLAN
“Further, an infrastructure plan for the next 10-15 years, after a detailed analysis on freight and passenger growth expected in India, is also envisaged to be created. The bank would be drawing that up as well,” the official said.
In line with Prime Minister Narendra Modi’s Digital India programme, the Railways wants to roll out a ‘digital enterprise’ for which the bank will help integrate architecture and database management across its IT applications.
ET View: Sensible!
It would be sensible for Railways to tap multilateral funding. Resources should be leveraged from National Investment and Infrastructure Fund. The way ahead is to plan modular projects, which can generate cash reasonably quickly. Railways need to keep a close tab on borrowings, given that operating ratio is in high nineties (over 90% of revenue earmarked for routine expenses). So, resource allocation and prioritising expenditure is important.Hence the rationale to access global expertise for programme management and attendant advisory services. It would optimise resource usage.