Indian Railways has approved six freight railway line projects worth a combined ₹15,976 crore, marking the first time it will use the Hybrid Annuity Model (HAM) to bring private investment into railway infrastructure.
The six projects, cleared by the Public Private Partnership Appraisal Committee (PPPAC) under the Ministry of Finance, will cover approximately 647 km of railway lines across Odisha, Telangana and Jharkhand.
Under the HAM framework, Indian Railways will fund 40% of the project cost during the construction phase, while the private developer will finance the remaining 60%. The private investment will subsequently be repaid through instalments along with interest after the railway lines become operational.
In addition to the capital repayment, Railways will make regular payments to the private partner for the operation and maintenance of stations, tracks and other project assets.
Unlike a conventional private railway concession, however, Indian Railways will operate the trains and retain the freight revenue generated from the lines. It will also bear the traffic and revenue risk, ensuring that the private developer is not adversely affected if actual freight volumes fall below projections.
The HAM structure has already been widely used in India’s highway sector, where it enables the government and private sector to share project financing and construction risks.
Of the six approved freight lines, four are located in Odisha, while the remaining two are in Telangana and Jharkhand. The routes are primarily designed to facilitate the movement of coal, along with iron ore, cement, foodgrains and chemical fertilisers.
The projects have a combined estimated capital cost of around ₹40,866 crore over their 17–19-year concession periods.
The proposals will now require final approval from the Union Cabinet before implementation. The government is expected to invite bids during FY 2027-28, with construction targeted to commence from April 2028.
The move represents a significant shift in Indian Railways’ approach to infrastructure financing, opening the door for greater private-sector participation while allowing the national transporter to retain operational control and freight revenue.