To Setup New Rail Corporation for FDI.

To Setup New Rail Corporation for FDI.

The Union Cabinet will soon consider a proposal to delink rail infrastructure development from the Railway Budget, paving the way for partial corporatisation of the Railways. The move has come in the backdrop of a pileup of railway projects for new rail lines announced over a decade, with the majority of them seen financially unviable but thrust on the Railways due to political considerations.

Furthermore, the proposed corporation would become a channel to route FDI in railways, with the areas of developing port and mines terminals, last-mile connectivity, modernisation of signalling being the likely priority. With railways minister Suresh Prabhu having said that his government is looking at the railways to contribute two to three per cent to GDP growth, the proposed corporation is likely to give a major fillip to linking up industrial bases along with connecting mining centres with their consumers in power, steel and other sectors, said a senior official.

The All-India Railwaymen Federation, the largest union in the railways, after getting wind of the government’s move, shot off an angry letter to Mr Prabhu on Wednesday, alleging that it would lead to privatisation.