Aug 18, 2014

FDI in railway projects: A tweak in 'transportation' to attract investments

Easier foreign investment rules, cleared by the Cabinet last month, will open rolling stock and the railway network to private players.

The foreign direct investment (FDI) policy of 2013, which has railway transport in a no-go list, will now only keep railway operations off limits. Only railway operations, and not rolling or fixed stock, will remain a government monopoly in the Industries Development and Regulation Act, 1951.

These changes will be done through notifications issued by the department of industrial policy and promotion (DIPP), according to a recent Cabinet order.

Rail transport is a broad term encompassing rolling stock, the rail network and operations. Once replaced by railway operations, the other areas will be out of their current restrictions.

The government will also list pieces of railway operations that can be handed over to private players like freight corridors and high-speed trains.

Once the notifications are issued, the FDI policy and Industries Act will be in line with a 2012 policy of Indian Railways. The policy, also approved by the Cabinet, spelt out participative models for rail connectivity.

Private companies, including foreign ones, were allowed to invest in railway infrastructure and connectivity projects after approval from Cabinet.

Railway officials said the policy clashed with the restrictions of the Industries Act. Despite an ambiguous legal position, the railways ministry floated a feasibility study on port connectivity. Also, proposed locomotive factories in Madhepura and Marhowra attracted interest from GE, Alstom, Bombardier, Siemens, besides China's CNR Corp and SR Corp.

Officials said the Cabinet note on foreign direct investment was initiated by the DIPP and promotion to end the legal uncertainty over private investment in the railways.

Despite public-private partnership projects announced in several rail budgets, the investment since 2000 has been merely Rs 3,000 crore, of which less than 10 per cent has come from private firms, according to a report by the Comptroller and Auditor General.

Bid bonds extended again for Oman Rail PMC package

MUSCAT -- Underscoring challenges in naming a Project Management Consultant (PMC) for the Oman National Railway Project, the Tender Board has instructed bidders for this key contract to extend their bid bonds by a further two months.

It has been over five months since three consortiums, each led by a prominent international rail engineering services provider, had submitted firm technical and financial offers for the prestigious Project Management Consultancy package when bids closed in March.

However, the selection of a successful bidder for the contract has so far eluded authorities, prompting the Tender Board to ask the bidders in question to extend their bid bonds to ensure the validity of their offers under tendering procedures. With the latest round of extensions, the validity of the bid bonds has now been pushed forward to October 25, 2014, the Observer has learnt.

In contention for the PMC contract are consortiums headed by Korea Rail Network Authority (South Korea), Técnicas Reunidas of Spain, and Parsons International.

As the principal interface between contractors and the client, the Project Management Consultant has one of the most significant roles to play in ensuring the smooth, timely, and cost-effective implementation of the multi-billion dollar national railway project.

The selected Project Management Consultant is required to, among other things, undertake a complete review of the preliminary design work of the network already prepared by Italferr, the Preliminary Design Consultant for the Oman National Rail Project. Additionally, the PMC will review the contract process, extend contract management and construction supervision, and provide project management services.

Part of its brief is to oversee the procurement of rolling stock and procurement of the services of a rail transport operator in coordination with the government. Also as part of its remit, the PMC will be responsible for testing and commissioning of the completed railway system of each segment planned for the Oman Railway project.

Keen to ensure that the delay in the award of the PMC package does not inordinately set back the implementation of the rail project, Oman Rail Company recently completed the process of prequalifying bidders for the all-important Design & Build Infrastructure and Systems Technology packages.

Last week, a total of 23 consortiums and joint venture partnerships, each led by a global engineering or technology heavyweight (depending upon the package they are registered for) were declared as prequalified to participate in competitive tenders due to be floated later this month for the implementation of the rail project.

Up for grabs initially is a contract for the Design & Build package covering the 170 km Sohar -- Al Ain segment, which will link Oman's national rail network with the Gulf-wide railway system. This segment is targeted for completion during 2018.

Oman Rail Company has been tasked by the Ministry of Transport and Communications to oversee the implementation the national railway system, which envisions the construction of a 2,244 kilometre-long network extending from Buraimi in the north to Salalah in the south. En route, the network will connect Khatmat Malaha, Sohar Port, Duqm Port, Salalah Port and all major cities and towns in-between.

Odisha urges Centre to sanction two rail projects on cost sharing basis

Keeping in view low or negative rate of return (RoR) of Jeypore-Malkangiri and Jeypore-Nabarangpur rail link projects, the state government has urged the Railways ministry to sanction these projects on cost sharing basis.

"The Odisha government has time and again raised demand for sanctioning Jeypore-Malkangiri and Jeypore-Nabarangpur railway projects but it has not yet been sanctioned probably due to low RoR. Both these projects are proposed in one of the most backward Naxal affected tribal regions of the country", R C Majhi, state commerce & transport minister wrote to Railways minister D V Sadananda Gowda.

With the projected RoR of Jeypore-Malkangiri link being 12 per cent, the state government has agreed in principle to bear 25 per cent of the construction cost of the project. The funding support of the state government is expected to raise RoR of the project to 17 per cent, higher than the cut off criteria of 14 per cent fixed by the Ministry of Railways.

On the contrary, factoring in the negative RoR of and Jeypore-Nabarangpur railway project, the Odisha government has agreed to provide the entire land free of cost and also bear 50 per cent of the construction cost. The state government has pitched for national status on this rail project, citing that it is going to bring socio-economic benefit to the Naxal affected and tribal dominated region.

China inaugurates new rail link in Tibet, close to Indian border in Sikkim

BEIJING: China on Friday inaugurated its second railway line in Tibet, built at a cost of $2.16 billion, close to Indian border in Sikkim, enhancing mobility of its military in the remote and strategic Himalayan region.

The 253-km railway line links Tibet's provincial capital Lhasa with Xigaze, the second-largest city in Tibet and also the traditional seat of the pro-Beijing Panchen Lama — stated to be second important Monk in Tibetan hierarchy.

The new line near the Indian border in Sikkim is also close to China's border with Nepal and Bhutan.
Source..times of india

Hyderabad Metro rail alignment shift to protect monuments

Coaches of the Hyderabad Metro (Photo: PTI/File)

Hyderabad: Telangana Chief Minister K. Chandrasekhar Rao on Sunday said that the Hyderabad Metro Rail alignment was being changed to protect Sultan Bazaar, Moazzamjahi market and the Telangana martyrs’ memorial.

He said that the government had already conveyed its decision to L&T.

L&T has requested to alter the Metro Rail route by the Telangana government.

“We have suggested that the Metro route should be diverted towards Kacheguda at Narayanguda to avoid Sultan Bazaar. Besides, we are looking at diverting the Metro to behind the Assembly building to avoid the Telangana martyrs’ memorial. Also, realigning the Moazzamjahi market route is being worked out,” Chief Minister Mr K. Chandrasekhar Rao said.

He added that he had had detailed discussions with HMR and L&T officials over realigning the route and they were convinced with the alternatives proposed by the government.

However, the government has softened it’s earlier stand on taking the Metro underground at these localities and has instead pitched for realignment after builder L&T cited huge financial repercussion that would make the project unviable.

Mr Rao blamed the previous government for entering into an agreement with L&T without addressing Sultan Bazaar and other contentious issues. “When I proposed the alternate routes they were convinced. They said that the then government had not brought these issues to their notice, else they would have planned accordingly,” Mr Rao said.





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