India's railway minister to seek cabinet approval for foreign investment in rail infrastructure, with focus on improving punctuality, safety, average speed; India's rail network is Asia's oldest

Cindy Allen

July 8, 2014 (Bloomberg LP) – India’s railway minister said he will seek cabinet approval for foreign investment in rail infrastructure as Prime Minister Narendra Modi strives to modernize Asia’s oldest network. The approval will be sought to enable foreign direct investment, excluding “railway operations,” Rail Minister Sadananda Gowda said today in New Delhi, without elaborating. He was announcing the operator’s budget for the year ending March.

The move has potential to bring more business for companies such as General Electric Co. and Bombardier Inc. as Modi aims to fix the nation’s creaky infrastructure with new high-speed trains and urban-transport services. Gowda said last month the state-run railway needs to focus on improving safety, punctuality, raise average speed to at least 150 kilometers (93 miles) per hour and become more competitive compared with transportation by road.

Railways last month raised passenger and freight fares, giving Modi room to cut subsidies after he said he’s ready to take unpopular steps to improve fiscal health in Asia’s third- largest economy. Modi led his party to a landslide election win in May with the promise of economic development and slower inflation.

On July 10, Finance Minister Arun Jaitley will present the Modi government’s first general budget.

To contact the reporter on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net Subramaniam Sharma

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