Set Up Mechanism To Make Rlys Cheaper Than Roads

New Delhi, February 27: | Updated: Feb 28 2003, 05:30am hrs
Coming after a day of freight and passenger fare cuts, the Economic Survey talks of putting in place institutional mechanisms for making the Railways cheaper than roads. Incidentally, the Railway Budget was silent on any such mechanism.

The observation of making the Railways cheaper comes along with the need to promote highway development but if volumes in Railway traffic come at the cost of roads, toll collections will go down.

That the governments focus has moved to the Railways after roads is apparent from the survey. It talks of the need to restructure the Railways functioning and adoption of special purpose vehicle route to fund projects. The experience with the transformation of telecom, roads and ports serve as role models for the institutional change that may be required, it says.

The survey is contradictory in many ways. It speaks of the limited scope for obtaining user charges through tolls but at the same time calls for imposition of toll for funding the National Highway Development Project. The Survey favours annuity model of financing highways. The operator asking the govt for lowest semi-annual fee bags the contract under the annuity mode . When there are many candidate routes on which new roads can be built, the annuity model allows a market-driven allocative mechanism, it says.

When it comes to the port sector, it states that there has been an improvement at major ports in the principal indicators of efficiency like the average turnaround time which came down from 4.1 days in 2000-01 to 3.7 days in 2001-02.