The facts are damning. Of the new lines introduced by the Indian Railways, in the last few years, barely 10 per cent are financially remunerative. These projects which today require Rs 19,330 crore for completion, will take 40 years to complete at the current rate of funding. And this does not account for cost escalation. In the gauge conversion programme over 50 per cent of the projects are unviable. Here the white paper offers a small concession - they are socially desirable (read: they have been demanded either by powerful politicians or members of parliament for their constituency). But even these at the current level of funding will need a decade to be completed.

This in effect, sums up the future of investment programme of the Indian Railways. On most of these projects there is no going back. Most are underway, and must be completed.

Soon after the Railway Budget was presented this year, the government released a status paper on the Indian Railways. Routine, except for the fact that this time round it was the instrument of debate. Where was the Indian railways headed? Over the last fifty years, the railways share of freight traffic has declined from 89 per cent to 40 per cent and passenger traffic from 80 per cent to about 20 per cent.

The status paper clearly indicated that the trend had to be reversed. The discussion was only about how. And this discussion again was crucial only because the capital support from the exchequer has declined from 75 per cent until the Fifth Plan to about 23 per cent in this Plan. Clearly, the Indian Railways will have to fend for itself - and whether it borrows commercially or not - the bottomline is greater internal revenue generation. The white paper intended to reveal the current state of the investments in the Indian Railways unfortunately only shows how remote this possibility is. New lines, essentially the future of the Indian railways, which if chosen wisely could have created that revenue with which the railways hopes to modernise. But 90 per cent, according to white paper itself, are unviable.

The white paper itself reveals why this has happened. The National Transport policy has laid down guidelines for taking up new line projects. These were basically meant to cater to coal mines, steel plants and other major industrial growth centres. Besides serving strategic national interests, these would generate high volumes of freight, helping subsidise passenger traffic and contribute to surplus. And even these were to be taken up after survey indicated a healthy internal rate of return, and was vetted by the Planning Commission, the Railway Board and the ministry of Finance.

But the reality is quite something else. As annexures to the white paper reveal, of the 21 major new projects included in successive railway budgets, 15 have not completed the survey, but fortunately have not been cleared. But four other projects, an amount of Rs 3,792 crore has been cleared. The story of gauge conversion is not a much happier one. Of the 16 projects already provided for in successive railway budgets, none has completed surveys.

If there is scant regard for surveys, clearance procedures have not been shown much respect either. Of the 41 new lines announced and provided for in the budget, 21 do not have required clearances and two have been conditionally cleared by the Planning Commission. The total cost of these projects - Rs 5,335 crore. Same is the story with gauge conversion. About Rs 2,889 crore worth of projects already included in the railway budget have not been cleared. There is also provision in the budget for a project not cleared by the Planning Commission.

In the case of gauge conversion, the policy laid down says that among other things it should be done in areas connecting ports, industrial centres and locations with growth potential. But reality is that of the 2,175 kilometres of conversion undertaken, 1,574 km was in Rajasthan for strategic reasons, and 601 km in Marathwada for development of backward areas. The result: track renewal and wagon replacement on profitable routes suffered.

What are the options? As the white paper itself says, if at least some projects are to see the light of the day, there will have to be an exercise in prioritising. And this, experts say will have to be on sound financial principles, if future income streams are to be protected.

But what the white paper really has really asked for is the segregation of commercially viable projects and socially desirable ones (according to railway sources, while some projects do belong to this category, in recent years it has been used largely as a garb for political reasons). And the latter, it says, should be funded outside the railway budget, with assistance from the railway exchequer, without dividend liability. In short, the Indian Railways can no longer be a victim of political interference.