Report No. 3 of 2014 - Performance Audit on Public Private Partnership Projects in Indian Railways Union Government,Railways

Date on which Report Tabled:
Fri 18 Jul, 2014
Date of sending the report to Government
Government Type
Union Department
Transport & Infrastructure


Indian Railways (IR) is a prime mover in the transport sector of the nation. It is one of the largest railway systems in the world under a single management and is the single largest mover of freight in the country. Despite improvement in growth rate of freight, the market share of IR in freight transport has declined substantially from 53 to about 35 per cent in the last two decades. Creation of adequate capacity network was, therefore, essential to meet the challenges in growth of freight traffic.

The critical input identified by IR was the significant investment required for execution of projects to enhance capacity of railway's network. Shortfall in internal generation of resources coupled with inadequate budgetary support led IR to heavily rely on private sector investments. Public Private Partnership mode (PPP), Joint Venture Model, BOT1 model were some of the policies through which IR sought private investment.

IR executed eight PPP projects consisting of five Gauge Conversion and three New Line projects since 2000 through Special Purpose Vehicles (SPVs) and one Special Purpose Company (SPC) in collaboration with private partners. Audit study includes a sample of four Gauge Conversion projects such as PRCL, VMPL, HMRDC and Kutch Railway Company Ltd and two ongoing New Line projects namely HPRCL and KRCL

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