We will focus on network expansion: Nitish Kumar

Updated: Jan 31 2002, 05:30am hrs
After a gap of two years, Railway Minister Nitish Kumar will present the Railway Budget to Parliament on February 26. In contrast to the no fare hike budget presented by Mamata Banerjee last year, Mr Kumar has already expressed his desire, in various fora, to go in for phased rationalisation of passenger fares. In an interview with Jyoti Mukul of The Financial Express, Mr Kumar shares his concern about the Railways financial health and hints that this years budget will stress on network expansion even at the cost of viability. Excerpts:

Will the Rakesh Mohan committee report be taken into consideration while preparing the budget
The Railways had set an internal committee to analyse the Rakesh Mohan committee report. It is yet to finalise its report. Any decision on the report will be taken only after this report is submitted.

You have made moves towards decentralisation of power. Is this aimed at making the Railway Board a sort of regulatory body entrusted with policy functions
Not as such. It is said that the issue of cross-subsidisation needs to be looked into by the regulator. Historically, the Railways have served the common man. A totally cost-based charge is not possible, especially at one go. Besides, before we talk about a regulatory body for the Railways, we must analyse whether such bodies in other sectors have served any purpose. We have attempted decentralisation by enhancing the powers of zonal general managers so that the Railway Board is able to serve as a monitoring and guiding agency and concentrate on policy issues.

How do railway finances look at this juncture, when you are preparing the budget
As regards freight, this year we will be able to load about 485 million tonne (mt) (he later quoted the figure of 490 mt) against the targeted 500 mt. So there will a shortfall in freight revenue. We had also expected Rs 700 crore to come from RailTel, but this will not materialise. Against Rs 230 crore earmarked for taking care of the Konkan Railway Corporations bonds, the Railways will end up spending Rs 744 crore. We had also hoped that some money from the suspense account constituting dues from power houses will flow in, but instead of the money coming in our dues have piled up. I have held discussions with power minister Suresh Prabhu on the issue.

The high rate of tariff being charged to the Railways for electricity also came up for discussion. Our working expenditure has increased because of the high tariff that we pay to the state electricity boards. At least, Rs 400-500 crore can be saved if tariffs are rationalised. Moreover, some states, like Andhra Pradesh, have imposed a surcharge following which the South Central Railway had to pay an additional Rs 50 crore.

But there is some good news, too. The Indian Railway Catering and Tourism Corporation (IRCTC) will be generating revenue of about Rs 30-35 crore by March 31. The entire catering operations of the Railways will be transferred to IRCTC before the end of the financial year, without any job loss.

Have the austerity measures yielded results
Austerity has helped us save over Rs 1,000 crore. We were able to plug various loopholes in the system, besides exercising stricter vigilance. Four zonal railways have submitted a plan for incorporating a centralised material accounting system. This will help them save money.

Since the Railways are in financial trouble, will new projects be taken up
There is some misunderstanding here. The Railways belong to the country. We have to undertake works. Projects have always got budgetary support. But we will have to undertake asset renewal on our own. This area has been neglected for years. We have decided to meet the cost for asset replacement through appropriate allocation in the Depreciation Reserve Fund.

The new plan will focus on augmentation and expansion. We want to lay 11,000 km lines during the Tenth Plan. This time round, when the government took a policy decision to pump in money into infrastructure, the Railways were ready to perform. We also prepared a list of last-mile projects.

Do you think projects should be taken up at the cost of viability
Whether investment should precede volumes or volumes should take precedence over investment vis-a-vis capacity enhancement is a chicken-and-egg case. Look at China. It is going in for massive expansion of the rail network in the western and northern regions.

Do you think that the stress being laid on the road sector is misplaced, and that the Railways should get more money from the government
Road construction is important for the countrys development. I would not say that money should not be put in the road sector, but simultaneously there should be a move to strengthen the rail network. There should be augmentation of both the road and rail networks along the Golden Quadrilateral and its diagonal, where 90 per cent of the traffic is concentrated. Till now the Railways were building only 100-125 km per year. Now, this will have to increase.

We have sought higher budgetary support and assistance for certain projects that are important, require massive investment but will not give adequate returns. For instance, extension of the rail network from Udhampur to Baramullah alone will cost Rs 4,000 crore. The Railways have also proposed that three projects in the north-east be funded from the non-lapsable fund for the region.