Framework for private sector participation in Indian Railways soon

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Kolkata | Published: August 22, 2015 12:08:28 AM

Ministry to come up with regulatory framework for participation, tariff recommendation on lines of Debroy committee suggestions

The railway ministry will soon put up a regulatory framework for private sector participation and tariff recommendation in Indian Railways. This regulatory framework would be created on the lines of the Bibek Debroy committee’s recommendations, Union railway minister Suresh Prabhu said.

The Debroy committee has recommended setting up a quasi-judicial railway regulatory authority and suggested unbundling and restructuring the railways in the next five years. After the changes made in the first five years, the government should phase out the system of presenting a railway Budget. The social cost borne by the railways alone should be distributed to the entire government. This cost should come as subsidy to the railways, the committee recommended.

“We will bring deep-rooted institutional change in the railways,” Prabhu said, adding the ministry has already started HR and management audits to determine efficiency parameters. The ministry will also start doing water and power audits to bring about cost efficiency in its operations, he said.

“We are trying to bring down the cost of electricity consumption by R3,000 crore a year. The railways is entering into new power purchase agreements and is also changing its transmission network. This will affect a paradigm shift in matters of operations, while also redefining safety parameters of the Indian Railways,” Prabhu said.

The government, he said, would spend $120 billion in the next five years for upgrading the systems of railway operations and providing better facilities. At least 400 stations would be developed into A and A+ categories.

However, the railways was looking forward to the state governments and some big PSUs like Coal India (CIL) and SAIL to form joint ventures. At least 17 states could be stakeholders in the development of the railways.

“The proposition of forming JVs with the state governments can be a new avenue of revenue for the states,” a senior railway official on the condition of anonymity said. He said it was actually former railway minister Mamata Banerjee who first proposed a railways- SAIL JV in implementing an engineering project.

The earlier UPA government had brought CIL, the railways and the Chhattishgarh government across the table to implement track-laying projects for the evacuation of coal.

The present government is thinking in a bigger way and wants to rope in a number of state governments as stakeholders. This would also prepare the ground for unbundling and restructuring the railways, the official said.

However, on the cargo front, the railways has already developed a capability of handling 1.2 billion tonne per annum but there has not been enough cargo generated this year so far for the optimum utilisation of capacity. “October onwards is the peak business period and we will have to see whether the railways cargo handling capacity is fully utilised.

The railways should enable the country’s economic growth by at least two-three percentage points,” Prabhu said at an interactive session of the Bharat Chamber of Commerce.

Earlier, Prabhu met West Bengal chief minister Mamata Banerjee and sought cooperation in implementing pending railway projects in the state.

He said the Indian Railways has targeted completing the 1,893-km Eastern Freight Corridor between Ludhiana and Dankuni by 2019. The Centre also plans to construct an industrial corridor along the alignment of the corridor.

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