The railways have had a particularly difficult year. What is your assessment of the situation?
There has been a slight downturn in the economy. The slowdown was really in 1997-98, when GDP growth was barely five per cent. The turnaround has already begun. Another factor has been the good monsoon this year. As a result, we expect a GDP growth of 5.8 per cent this year. The economy is definitely looking up. But last year's slack economy naturally gave us less freight to carry. Our freight earnings in1998-99 will be lower than in 1997-98.

Although freight is the only earner for the railways, there has been less investment in rolling stock but more in projects such as unigauging. Will there be a change in policy now?
We cannot change course mid-stream. Without arguing the merits of the project, if unigauging has been launched, then not completing it will be more of a loss. So unigauging will have to be taken to its logical conclusion.

We will now have to consolidate instead of introducing more projects. We will concentrate on projects on hand. We will focus on five major items - conversion to broadgauge, lines already announced, doubling of lines, electrification and finally metropolitan transport projects. Just these will require Rs 34,000 crore. From the centre we will get Rs 9,500 crore. So the only option is to prioritise.

What will be the criteria to prioritise?
We will first complete all economically viable lines. And secondly, socially desirable. For instance, projects inAssam and the North-east. Or for that matter, Jammu and Kashmir. Of course, the support for this must come from the general budget.

Socially desirable projects have cost the nation. The latest CMIE report on infrastructure puts annual losses on uneconomic lines at Rs 243 crore.

In future, before we announce new projects we will have to look at economic viability as a factor more closely. But right now all that the railways can do is prioritise and complete all unfinished work. It is really tightrope walking. Given this situation that we find ourselves in, we decided to publish the white paper. It had never been done before. We followed this up with `Samvad', which were discussions with the public at large.

Had there been this kind of debate on the trade off involved in choices, the railways may not have been in this difficult situation today. The situation is not very encouraging, but within the constraints, we will do the best we can.

So far you have relied on budgetary support, World Bank, ADBand in recent years the IRFC for funds. Will you now consider other sources?
We certainly have to find the funds. We have to see what gets us more income. Last year as we had lost to the road sector, we did not touch freight fares. In fact in the second half, we introduced the volume discounts, and station to station fare cuts. For us it was quite a radical move. We have managed to attract more freight as a result of these measures than we would have. We will also look at piecemeal traffic. But our option this year will be clear by the 25th.

Last year the railways paid Rs 1,700 crore as dividend and IRFC another Rs 2,000 crore as lease rentals. Is there an attempt to reduce the debt?
This is an issue that will have to be tackled soon. We are no longer paying dividend on metropolitan projects. Only Mumbai is a net earner, the other three are losing heavily. We will have to wait for the recommendations of the Railway Convention Committee. Why has privatisation never been very successful in therailways? BOLT has never been successful. The private sector has never been equal to this task. In the Opposition I had said that this. Now as minister, that has been confirmed. Where I see private participation is in funding. For instance, in the Mumbai Rail Vikas Corporation, they may not participate in equity, but we will be raising debt from the public.

Do you see railways being threatened by the new expressways and pipelines being set up by oil majors?
We are already under a threat. But we have our own areas of excellence like the Container Corporation (CONCOR).

They will play a larger role in the future. But yes, once the pipelines come, a significant portion of our high margin business will dry up. So, the future will be in constantly strategising, experimenting and watching the way production is moving.