Indian Railways has approved six freight lines worth ₹15,976 crore, its first projects to bring in private funding through the HAM model.

The Public Private Partnership Appraisal Committee, under the Ministry of Finance, cleared these six projects last month. Together, they cover 647 kilometres of railway track.

This marks the first time Indian Railways is using the Hybrid Annuity Model, a funding structure where the government and a private company share both the cost and the risk of building a project.

This same model has been used for years in India’s highway sector. Here’s how the money will actually be split. Railways will pay 40% of the project cost as a grant while construction is happening.

The private company funding the remaining 60% will get that money back later, through instalments plus interest, once the line is up and running.

Railways will also pay the private partner regularly to maintain stations, tracks and other assets.

Once these lines start operating, Railways will run the trains itself and keep all the freight revenue collected.

It will also take on the risk if freight volumes or revenue fall short of expectations, so the private developer isn’t penalised for weaker than expected traffic.

Four of the six lines are located in Odisha, while the remaining two run through Telangana and Jharkhand.

These routes are mainly meant to move coal, along with other cargo like iron ore, cement, food grains and chemical fertiliser.

The total capital cost across all six projects, spread over their 17 to 19 year concession period, works out to around ₹40,866 crore.

These proposals still need final approval from the Union Cabinet before construction can begin, and the government expects to invite bids sometime during the 2027-28 financial year, with construction targeted to start from April 2028.

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