New rail minister to decide fate of R40k-cr safety fund

Written by Rajat Arora | Ashish Sinha | New Delhi | Updated: Oct 29 2012, 09:24am hrs
New railway minister Pawan Kumar Bansal will have to take a call on a proposal readied by his predecessor CP Joshi for a new, non-lapsable R40,000-crore special safety fund for the national transporter. If the proposal materialises, it would be the largest Railway Safety Fund (RSF) the country has ever createdalmost two-and-a-half times the Special Railway Safety Fund (SRSF) started by the NDA government in 2002-03 under the then railway minister Nitish Kumar.

According to sources, the proceeds from the proposed RSF will go towards the renewal of over-aged assets of track, bridges, signalling gear and rolling stock within a fixed time frame of 5-6 years. The move also comes within months of the Comptroller and Auditor General of India (CAG) report, which severely criticised the Indian Railways for underutilisation of the existing safety fund.

According to the rail ministry, the proposed fund will be fed from a host of sources. The options include commitment of dividend-free grant by the finance ministry (around R20-24,000 crore spread over the next 5-6 years) and a contribution from the Central Road Fund (R5,000-6,000 crore).

The rail ministry will also contribute from the Railway Safety Works Fund (maintained by the finance ministry), out of the dividend payable to general revenues. The ministry is also in favour of imposing a small safety cess (R5-10) on railway tickets to generate R5.000-6,000 crore annually. This was also proposed by the former rail minister Dinesh Trivedi and by NDA government in 2002-03.

Sources in the rail ministry said that a detailed proposal to this effect is being worked out, which will then be sent to the finance ministry within the next few days. Officials said that the rail ministry will also request the finance ministry for a waiver on the dividend they pay on the gross budgetary support, which works out to be R5,000 crore. This too will go towards the RSF kitty.

We'll be asking for a one-time grant from the Ministry of Finance. When the first fund was set up in 2002-03, the grant came from the finance ministry. While it is correct that our financial performance has not been on expected lines in recent years, there's certainly a need to allocate higher resources for strengthening safety, said a senior railway officer.

The CAG audit report submitted in Parliament in May studied the implementation of the policy with respect to safety works between 2006-07 and 2010-2011. During the period, the railway department not only made less budgetary allotment from the funds available with the RSF, but also surrendered a major part of it that was allotted in the Budget. The study revealed gross underutilisation of funds from Railway Safety Fund since inception in April 2002. Between 2006-07 and 2010-11, Budget allotment was less than 45% of available funds while in a majority of instances of work, 80% of the fund allotted was surrendered, the CAG report had said.

As a result, 1,500 level crossings carrying high road-rail traffic remained unmanned. Also, safety enhancement devices, such as lifting barriers, interlocking and telephones, were not provided to eligible cases, the report said.