Now Reading: Railways unveils two new PPP models to tap Rs 2.62 lakh crore pipeline
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Railways unveils two new PPP models to tap Rs 2.62 lakh crore pipeline
Indian Railways plans to introduce a Development Partner Model (DPM) and a Hybrid Annuity Model (HAM) to attract private capital into a ₹2.62 trillion asset pipeline under NMP 2.0, according to two…
Indian Railways plans to introduce a Development Partner Model (DPM) and a Hybrid Annuity Model (HAM) to attract private capital into a ₹2.62 trillion asset pipeline under NMP 2.0, according to two people aware of the matter. The models borrow from highway-sector practices and target projects that lack a standalone revenue stream, such as new trunk lines, doubling and station redevelopment.
The railway ministry has identified 54 projects worth ₹1.81 lakh crore for PPP execution. Under HAM, the government will provide 40% of construction cost upfront, with developers recovering their investment through annuity payments. Railways retains operational control over strategic assets. The move aims to supplement existing frameworks including BOT and joint ventures.
Experts said HAM may become the primary vehicle for large capacity-augmentation projects, while DPM could suit smaller last-mile connectivity projects. Railways has already completed 18 PPP projects worth ₹16,686 crore, with seven more under implementation worth ₹16,362 crore.
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The ₹2.62 trillion pipeline comes under NMP 2.0, which the government announced in August 2024 to monetize public assets across sectors. Railways have historically struggled to attract private capital for core expansion projects, unlike highways where HAM is well-established. The key distinction is that railway assets lack independent revenue streams, a new trunk line does not generate tolls. The ministry now has 54 identified PPP projects worth ₹1.81 lakh crore, but execution will depend on whether private developers accept HAM terms given long construction periods. The Railway Board will finalise the contract templates, the next signal is how many projects reach financial closure in FY26.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
