Railways to assess ‘intangible benefits’ of unviable projects
PAVING THE way for more investments into connectivity projects meant for far-flung, backward and hilly areas where creating large connectivity-infrastructure like railways did not make sense financially, the government has decided to give weightage to “intangible benefits” like social, environmental and network effects of such projects.
The policy change gives the government the necessary leeway to justify connectivity projects of new lines, gauge conversion, doubling of lines, etc even if they do not necessarily generate financial returns. This also means Railways will not have to struggle to obtain financial sanction for these projects.
The Ministry of Railways has sent a set of four new project proposals for appraisal to the NITI Aayog, justifying their investment based on this new ‘Modified Economic Internal Rate of Return’ model.
