Speaking to The Financial Express, Konkan Railway Corporation Ltd's (KRCL) managing director B Rajaram said that the railway ministry has tried to help KRLC by making a Rs 92-crore enabling provision in this year's Budget.

On the reason for low freight traffic, Rajaram said it was mainly because the industry did not make investments as it did not expect the project to be over within the stipulated timeframe.

"The pattern of freight traffic has undergone change. For instance, earlier seven to eight rakes of foodgrains were moving between Punjab and Kochi. The number has fallen to three."

Foodgrain movement has also been slow since procurement area has shifted to AndhraPradesh. Moreover, foodgrain havs been imported from southern ports.On the cement movement, Rajaram said, "Vessels have become a competitor with manufacturers preferring the sea route."

The recession in the steel sector has also contributed to lower freight earnings. KRCL's calculations were based on a number of steel units being present around Roha. "Usha Ispat dropped its plans for setting up sidings at Satatarda near Maharashtra-Goa border," he said.

Even POL traffic, which was expected to move to South, belied expectations. "Fortunately there has been some movement of fuel from the Mangalore refinery," he added.

To increase its freight earnings, the corporation is trying out six schemes. Among them is the roll-on and roll-off freight service between Kolad (Maharashtra) and Suratkal (near Mangalore, Karnataka) and Kolad-Goa. The service on 730-km Kolad-Suratkal stretch was started on trial basis in January this year.

Kolad-Goa service, introduced on February 22, is being used for transportation ofsulphuric acid. "It is safer and reduces turnaround time by 50 per cent."

Under the roll-on and roll-off scheme, loaded trucks are carried on to the train to their destination. For this, KRCL has borrowed flats from the defence ministry.

To boost its passenger traffic, a luxury star service between Mumbai and Goa would be introduced. KRLC has sought the Railway Board's assistance in this regard. The discussions are likely to bear fruit by April when the summer traffic begins.

Konkan railway is operating seven pairs of passenger trains including the Kurla-Mangalore Express and the Trivandrum Rajdhani Express. The project provided the missing railway link between Mumbai and Mangalore along the west coast.

The financing of this project was through public borrowings in which Maharashtra, Goa, Karnataka and Kerala were partners along with the Ministry of Railways. Out of the total estimated fund requirement of Rs 3,375 crore (gross), inclusive of about Rs 850 crore financing cost, Rs 800 crore wascontributed by these five partners as their equity contribution and the balance was raised through market.