By Rahul Satija
India is seeking investment from private firms to operate
passenger trains for the first time as Prime Minister Narendra Modi looks to tap new sources of cash to boost
economic recovery and create
jobs.
The Ministry of
Railways asked private companies to submit their interest to run passenger trains over 109 origin-destination routes via 151 trains, according to a statement Wednesday. The project will entail an investment of about 300 billion rupees ($4 billion), the ministry said.
The decision to partly open up the railway sector comes as Modi finds himself with limited fiscal room to support Asia’s third-largest economy, which is headed for its first contraction in over four decades. After years of small divestments, Modi launched India’s biggest-ever asset sale, a $29 billion privatization drive, even before the pandemic put the economy in a deep slumber.
India is facing public debt levels of 77% of gross domestic product, according to a recent Fitch Ratings note, and a fiscal deficit in double digits this year.
The selected private firms will have to manufacture a majority of the trains in India, the statement said. The aim of the plan is to modernize Indian Railways, cut costs and create jobs.