The Indian Railways has come out with a concept paper on Rail Development Authority of India (RDA), according to which the proposed body will be an independent and quasi-judicial one with four key functions — recommending tariffs, ensuring fair play and level playing field for private investment in railways, determination of efficiency and performance standards and dissemination of information.
Sources in the rail ministry said the authority will consist of five members and will be set up through and executive order, to be subsequently strengthened by legislation process. The transporter’s estimated losses in passenger segment is estimated over Rs 30,000 crore in 2015-16 coupled with the steady decline of the share of railways in freight traffic from 89% in 1950-51 to approximately 36% in the last few years. The independent regulator will enable the sector to move towards market-determined tariffs and full recovery of costs as well as reduce the prevalent cross-subsidies.
The RDA, besides other functions, will recommend tariffs both on passenger and freight front, but its role will be advisory in nature with the final call to be taken by the railway board, the sources said. “ In cases where the government does not accept the suggested tariffs, IR would need to be compensated either through allocations in the Gross Budgetary Support or other mechanisms,” a senior official said. While RDA’s role in fixing tariffs are advisory in nature, its ordres with respect to performance standards and penalties will be mandatory in nature,” he added.
After incorporating suggestions by the public the transporter in the first phase would set up an independent authority to address issues pertaining to special purpose vehicles, container train operators and other parties governed by concession/license agreements. It may be recalled that the National Transport Development Policy Committee report of 2014 and the more recent Bibek Debroy Committee report had suggested the creation of rail tariff authority.