AFTER ROADS and power sector, the next InvIT or infrastructure investment trust is likely to be in rail sector, which is increasingly looking to lure private investments in all areas of its operations.

The matter was discussed at a top-level meeting between the Railways and the NITI Aayog on Tuesday wherein it was discussed that projects which are operational will have to be identified for the trust — which operates as per SEBI rules — to pick up stakes in.

While the Budget this year has spelled out plans to monetise assets of the Dedicated Freight Corridors after commissioning, the DFC was discussed as an example, sources said. Typically, the idea is to get the investors to invest in lucrative, operational rail projects upfront and then through an arrangement within the InvIT keep getting returns from the project for the next 15-20 years. Foreign investors, institutional investors, companies among others can all invest through the InvIT as long as they are within the contours of the regulation defined, officials said.

Sources said that in simple terms, Railways will get the investment made on a stretch, like the DFC for example, upfront, and the investors will keep earning returns for the next several years.

The National Highways Authority of India and Power Grid Corporation of India currently have their InvITs.

The issue of increase in the haulage charge payable by private train operators to Railways was also discussed. Sources said it was cited that there should be a well-defined criteria of the increase in the future, rather than to link it with the Wholesale Price Index or the Consumer Price Index.

“Even if it is linked to the WPI or the CPI, the idea is to crystalise the rules of the future hike, say after five years or so, in a manner that does not leave anything to discretion or interpretation. This will instil confidence in private investors,” said a source, adding that even private players had requested that this issue be clearly defined in the contract.