Date:16/06/2006 URL: http://www.thehindubusinessline.com/2006/06/16/stories/2006061601960700.htm

Back `Pvt operators' rolling stock must have stringent audits'

Our Bureau

Many public-private partnership projects lined up in rail sector

THE MINISTER for Railways, Mr Lalu Prasad, and the Minister of State, Mr Naranbhai Rathwa, in the Capital on Thursday. — Ramesh Sharma

New Delhi , June 16

At a time when the Indian Railways is talking about letting private operators bring in their own rolling stock on its track infrastructure for its projects, Mr Braam le Reoux, head of Dynamic Rail, South Africa, said it is important to subject the rolling stock of private operators to stringent quality checks. This is important since rolling stock, which is not technically optimal for the track infrastructure, can potentially damage the tracks relatively faster.

Dynamic Rail is a railway management company. Mr Reoux was the CEO of Africa's largest railroad network— Spoornet— for eight years when its focus was to ensure a financial transformation.

He was speaking at a convention on public-private partnership (PPP) in Indian Railways organised by the Indian Rail Finance Corporation.

Mr Reoux stressed on the need to keep a close watch on the wear and tear that wheels would experience following increased axle loads.

"Wheel and wagon, and rail and tracks should be managed as integrated entity," Mr Reoux said.

"It is important to subject the rolling stock of private operators to technical evaluation," he said.

Passing off risks

Meanwhile, a legal expert in the railways arena, has stressed on the need to ensure that all risks of PPP projects are not passed on to the concessionaire.

"To ensure success of the PPP projects, Governments must not dump all the risks on the concessionaire," Mr Robert Leigh, Partner, Simmons and Simmons, a London-based legal firm, said.

Mr Christoph Wolff, Partner, McKinsey, Germany, who leads the global railways group within the consulting firm, said, "Majority of the PPP infrastructure projects over the next 10-15 years are from the rail sector.

"From these, majority are from Asia Pacific."

Out of the $470 billion worth of total PPP infrastructure projects lined up till 2015-20, 45 per cent are from the railways sector.

Out of these $209-billion rail projects, 34 per cent are from the Asia Pacific region, Mr Wolff said.

Earlier, the Railway Board Chairman, Mr J.P. Batra, said the Railways expects an 11 per cent growth in revenues in the current fiscal. "We have brought down our unit cost of operation by 19 per cent in the last two years," Mr Batra said.

The Railways Minister, Mr Lalu Prasad, said that Railways has to adopt the PPP model best suited to it in terms of productivity, efficiency and cost effectiveness.