Fare freeze cheers many, but finances still worry

Written by Nikita Upadhyay | Nikita Upadhyay | Mumbai | Updated: Feb 26 2011, 04:17am hrs
While unchanged freight rates have cheered the logistics sector, companies have expressed concern over the 'ambitious' network expansion and capacity addition plans, since the railways does not have adequate funds to see these projects through. Going ahead, the railways will have about Rs 8,000-9,000 crore cash surplus, which is insufficient for implementing the plans as private investors shy away, given the unpredictable nature of the policies announced, they say.

Focus on adding rail infrastructure and the dedicated freight lines should be accelerated to avoid congestion on the operative routes. Turnaround time on other routes, apart from Mumbai-Delhi is high. Until commitments are met with and return on investment is assured, private investment is unlikely said Sachin Bhanushali, president, Gateway Rail Freight.

The railway minister proposed an investment outlay of Rs 57,630 crore, of which Rs 9,583 crore will be used for new railway lines and significant funds for passenger amenities.

Vishwas Udgirkar, senior director, Deloitte said, A host of new projects have been announced. However, the budget is silent on the real progress of large projects announced earlier such as the Dedicated Freight Corridor (DFC) and has not put in place any concrete proposal to finance and implement these projects.