New Delhi, July 8: Industry today welcomed FDI in the railways but pointed out the absence of specific guidelines on the matter.
“Opening the railways sector to foreign direct investment (FDI) will provide the much needed push to the cash-strapped sector,” managing director of Alstom Transport India Bharat Salhotra said.
Experts believe private players will have to go through the fine-print of the budget to study the feasibility of FDI in the railways.
“In some areas 100 per cent FDI is needed. Nothing less than 50 per cent FDI would attract companies to invest in the sector,” said Nalin Jain, president and CEO, South Asia, GE Transportation. He said locomotives, wagons and tracks were some of the areas where FDI would be effective.
“If you have an FDI, you are not going to open FDI with no criterion,” Rajeev Jyoti, chief executive of the railway business at Larsen & Toubro, said.
On the public-private-partnership model, CII president designate Sumit Mazumder said, “Once you do a PPP, it stands on its own. A special purpose vehicle gets created and that company is accountable for its return on investment. So, Indian Railways will benefit from it if it’s profitable.”
“The PPP route will help overcome the constraint of low investment, enhance connectivity and accelerate the process of modernisation,” Ficci president Sidharth Birla said.