The Railways have shown little faith in the Government’s public-private partnership (PPP) model. With little help from the Japanese, the Railways have decided to fund the Rs 28,000-crore dedicated freight corridor project on its own.

According to fresh estimates, the rail ministry plans to finance the project using internal generation of funds, debt (including loan from Japan Bank for International Cooperation) and budgetary support. This tentative financing pegs debt at Rs 18,000 crore, budgetary support at Rs 2,500 crore and internal funds at Rs 7,500 crore. Confirming this, a railway official said, “The Japanese loan comes with certain riders, one of them being that we will need to get funding through the PPP route sanctioned by the bank.” The Japanese were not keen on PPP funding, he added.

The decision comes even as the finance ministry and the Planning Commission felt the project would turn out to be too expensive for the Railways to fund on its own. However, rail ministry officials argue that if the ministry makes profit of Rs 20,000 crore annually, sparing about Rs 5,000 crore for the project every year for five years would not be difficult.

Track ahead

•The Railways will fund the Rs 28,000-crore project on its own with little aid from the Japanese

•Tentative financing pegs debt at Rs 18,000 crore, budgetary support at Rs 2,500 crore and internal funds at Rs 7,500 crore.

•Decision comes even as the finmin and Planning Commission felt the project will be too expensive