UPDATE 1-India plans $63 bln expansion of rail infrastructure

(Recast, adds more details, quotes)

By Rajkumar Ray and C. Jacob Kuncheria

NEW DELHI, Feb 26 (Reuters) - India will invite private investment in upgrading rail infrastructure at a cost of 2.5 trillion rupees ($63 billion) over the next five years, Railways Minister Lalu Prasad Yadav told parliament on Tuesday.

Of the total investment, a trillion rupees would be in public-private partnership projects to upgrade facilities at railway stations, rail equipment manufacturing, multi-modal logistics parks, running of container trains, Yadav said.

"It would be difficult to finance such a large investment programme solely from Railways' own resources. Therefore we have started many public-private partnership schemes," he said while presenting the Railway Budget for 2008/09.

India also plans to increase the rail capacity of about 20,000 kilometers of high-density network, coal and iron ore routes and port networks over the next seven years at a cost of 750 billion rupees, he said.

Three quarters of the railways' goods traffic travels on these lines, which are operating at capacities in excess of 100 percent, Yadav said.

Indian Railways, running more than 14,000 trains a day, also plans "commercial use" of its vast land across the country to boost revenues, he said.

India is being plagued by bottlenecks in the transport sector that threaten to choke growth, and this has prompted government to build more rail lines, roads, ports and airports.