FDI not to be allowed in railway operations sector: Government

A day after the government gave clearance for fully opening up the railway infrastructure segment to foreign investment, Railway Minister D V Sadananda Gowda today made it clear that FDI will not be allowed in the operations sector of the national transporter.

"As far as the operating portion of the railways is concerned, certainly we are not allowing FDI. (It is) only in infrastructure and other areas," he told reporters outside Parliament House. He was replying to queries on the criticism by the opposition parties for allowing FDI in the railways.

Gowda said that one has to wait for a few months to guage whether railways would be able to attract foreign investment. The Cabinet had yesterday approved a proposal to open up cash-strapped railways to foreign investment by allowing 100 per cent FDI in areas such as high-speed train systems, suburban corridors and dedicated freight line projects implemented in PPP mode.  The FDI liberalisation in the sector would help in modernisation and expansion of the railway projects.

According to estimates, the sector is facing a cash crunch of around Rs 29,000 crore and allowing of FDI will help mop up resources. On the issue of substandard food served in trains, Gowda said that strict action is being taken against the caterers and fines are being imposed. "You might have seen some initiatives have been taken. Strict action is being taken against the caterers," he said.