Our operating ratio has been kept well in control through financial discipline

Updated: Feb 27 2013, 09:05am hrs
With no announcement of bullet trains and any other ambitious mega project, the railway budget for 2013-14 has come out to be very pragmatic. In a conversation with FE, Railway Board chairman Vinay Mittal says the budget doesn't make any tall claims and focuses on the long-term goals:

A debt service fund is being set up for the first time. What is its purpose

The debt service fund has to be constituted from our own internal generation, around 20% of which will go to this fund, and it will be an appropriation fund. We have to depend on JICA and World Bank loans, which have been taken for the freight corridor project. So, keeping the repayment of these loans in mind, a fund has been created.

The operating ratio has fallen drastically for this year and, for next fiscal also, it has been cut down by just one percentage point. Is it the most pragmatic budget in recent years

Its is a realistic budget. We haven't made any tall claims. Our operating ratio was 95% last year; this year, we have brought it down to 88.8% due to financial discipline. For next year, our budget estimate is 87.8%, which is achievable. Last year, we started on a bad note with the rollback in hike. It was being said that our operational ratio would be in the 90s, but due to financial discipline, we have kept it in control.

The Plan outlay of R63,363 crore for the next financial year is the highest ever. You are expecting R6,000 crore from PPP. Isnt this too ambitious

Getting investment through PPP would be a tough ask. But we are expecting R3,000 crore from investment in PSUs and the rest of the amount will come from states who are willingly to invest in the first and the last mile connectivity projects and sub-urban rail infrastructure. Then, there are projects, such as Mumbai elevated rail corridor, where private players have shown interest.

The railways plans to hire 1.25 lakh more employees. Will it be the largest hiring in a year by the railways How much will it impact the wage bill

This would be the largest hiring done in a year ever by the railways. A lot of people are also retiring, so it won't reflect much in our wage bill. The staff cost will go up by R1,000-1,500 crore. Staff bill is 37% of our total spending.

Do you think the gross budgetary Support (GBS) from the ministry of finance is sufficient

In the 12th Plan, the contribution of GBS is expected to be around 1.94 lakh. Going by that logic, the GBS should be around R50,000 crore every year. Had we got a larger share, it would have made a lot of difference.

With losses on passenger segment growing to R25,000 crore, do you think tweaking the freight charges in form of the Fuel Adjustment Component (FAC) is a right step

The FAC won't have much impact. Its a marginal component and we dont intend to get any revenue through it. It has been levied to neutralise the hike in diesel prices. We'll be able to get R4, 200 crore from FAC, which would help us absorb the fuel bill increase of R5,100 crore.