Railways moves to reboot decade-old PPP policy to cut investor risk

Seeking to revive private participation in railway infrastructure, Indian Railways has proposed key changes to its more than decade-old public-private partnership (PPP) policy, including extending concession periods to 50 years and shifting the entire responsibility of land acquisition to the national transporter.

According to a report by The Times of India, the proposed amendments aim to reduce risks for private investors and provide greater certainty in recovering investments -- long-standing concerns that have slowed private participation in railway projects.

Officials told ToI the overhaul is particularly important as the railways has already identified 15 PPP projects worth ₹35,800 crore to be taken up by March 2028. These include projects such as laying new railway lines, doubling tracks, and station redevelopment.

At present, concession periods for railway PPP projects generally range between 20 and 35 years, which officials believe may not provide sufficient time for private developers to recover large capital investments.

“We have forwarded some projects under PPP for final approval and more will be added to the list. The two critical changes will take care of all risks any project faces,” a railway official was quoted as saying by ToI.

Land acquisition risk to shift to railways

One of the most significant changes being proposed relates to land acquisition -- a major factor that has often delayed infrastructure projects in India.

Under the existing 2012 PPP policy, private developers or special purpose vehicles (SPVs) formed for specific projects bear the cost of acquiring land, even though the railway authorities handle the acquisition process.

Officials were quoted as saying that the revised framework would reverse this arrangement.

“In the proposed changes, railways will have the entire responsibility of land acquisition cost and the process for getting land,” one official said.

The shift is intended to remove a key uncertainty for investors, since delays in acquiring land have frequently stalled railway projects. The government is also drawing lessons from its experience with highway development, where land acquisition challenges had similarly slowed projects in the past.

Limited progress under the existing policy

Despite the PPP policy being in place since 2012, private investment in railway infrastructure has remained limited.

According to officials cited by The Times of India, only 18 PPP projects worth ₹16,686 crore had been completed through this route by December 2025.

Another seven projects valued at ₹16,362 crore are currently under implementation, including coal connectivity and port connectivity projects designed to improve freight movement.

The relatively slow progress has prompted policymakers to revisit the framework in an attempt to make railway PPP projects more attractive to private developers.

Early signs of the new approach

A move toward longer concession periods has already begun in some segments.

Railway minister Ashwini Vaishnaw recently announced a 50-year concession period for Gati Shakti Multi-Modal Cargo Terminals (GCTs) as part of a broader policy push to encourage private investment in freight infrastructure.

Officials said the proposed changes to the PPP policy would extend similar incentives to other railway infrastructure projects, potentially opening the door to larger private participation in the sector.

If approved, the amendments would represent the most significant revision to the railways’ PPP framework since it was first introduced more than a decade ago.

(With inputs from ToI)