Indian Railways to fund six freight lines via private investment

Indian Railways has received approval from the Public Private Partnership Appraisal Committee under the Ministry of Finance to develop six freight lines using the Hybrid Annuity Model (HAM). This marks the first time the railway sector will utilize this funding structure, which has previously been used in India’s highway sector to share costs and risks between the government and private companies.

The six projects span 647 kilometres of track with a total bid project cost of ₹15,976 crore. Over a 17 to 19-year concession period, the total capital cost is estimated at approximately ₹40,866 crore. Under the HAM framework, the Railways will provide a 40% grant during construction, while private firms will finance the remaining 60%. The private partners will be reimbursed through installments and interest once the lines are operational.

Four of the lines are located in Odisha, with the remaining two situated in Telangana and Jharkhand. These routes are designed to transport essential commodities, including coal, iron ore, bauxite, cement, food grains, and chemical fertilizers. The projects now await final approval from the Union Cabinet, with bidding expected in the 2027-28 financial year and construction targeted to begin in April 2028.