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India wants foreign investors to help overhaul its railways

, July 9, 2014, 0 Comments

The Indian government has presented plans to open its railways to foreign investment. It said the crumbling network needed a speedy overhaul, and that public-private partnerships would be encouraged.

India unveiled plans on Tuesday to attract foreign capital for the modernization of its railway network.

The government indicated it was willing to spend more money on the overhaul, with the rail finance bill regarded by economists as setting the stage for the general budget debate in which the right-wing government of Prime Minister Narendra Modi was to lay out keenly awaited economic reform plans.

Railway Minister Sadananda Gowda said the state-run network carrying 23 million people daily needed an “immediate course correction” after decades of mismanagement.

More high-speed trains
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Gowda said he would seek cabinet approval for foreign direct investment in the railways for the first time and undertake a strong push for public-private partnerships in all areas except passenger operations.

He also announced plans to move ahead with a network of high-speed trains running at speeds of up to 200 kilometers per hour (120 miles per hour) on existing, but upgraded rails.

The minister added there would be a 40-percent hike in the budget for cleaning trains and improving toilets whose state often horrified travelers.

Track modernization and carriage purchases were to be funded partly through a double-digit passenger fare increase announced last month, Gowda said. Analysts claimed that as much as $500 billion (367.7 billion euros) had to be invested over the next 10 years to overhaul the railway system.