Financial Daily from THE HINDU group of publications
Sunday, Feb 27, 2005
Express ideas, but no back-up
New Delhi , Feb. 26
THE Railway Minister, Mr Lalu Prasad, has once again demonstrated his facile economics by refraining from jacking up either passenger fare or freight fare, though his rationalisation of the goods tariff by pruning the 4,000 commodities into only 80 groups and the number of freight structures from 27 to 19 classes with uniform intervals between successive classes might help garner resources of Rs 650 crore.
His contention that the Railways will work not only towards streamlining passenger services but also initiate commercial, operational and investment-oriented initiatives in the freight sector to do "everything possible to improve the Railways' share in the transport sector" may seem impressive but is not backed by any plan to get off the ground.
For instance, under the Integrated Railway Modernisation Plan, unveiled with fanfare in November 2004, the Rail Budget indicated only the best intentions. Accordingly, 150-kmph trains on the New Delhi-Howrah and New Delhi-Chennai routes are being envisaged. Freight trains at 100 kmph on the golden quadrilateral and its diagonals, higher axle load, double stack containers and roll-on-roll-off wagons on identified routes are also being planned.
But with even express trains such as the Rajdhani touching speeds of just 110 kmph and goods train achieving 23 kmph, the idea of running trains at 150 kmph, without sufficient back-up particularly in rolling stocks and other assets indispensable to maintenance and operations, the modernisation plan seems chimerical .
The annual Plan outlay for the Railways for 2005-06 has been pegged at Rs 11,827 crore - Rs 851 crore more than the current fiscal. It will also get Rs 3,522 crore for safety-related works through the special railway safety fund, taking the total outlay to Rs 15,349 core.
However, as a special gesture, the Prime Minister has directed the Plan panel to permit the Railways to access extra budgetary resources of Rs 3,000 crore by "identifying and posing financially viable throughput enhancement schemes on a project basis".
Enhancement schemes include enhancing speed of trains, both passenger and freight, and introduction of higher axle load.
But how far the Railways goes to introducing these schemes, given the Minister's penchant for populist measures such as introducing new trains and increasing frequency, remains a moot point.
A cursory look at the net railway plan outlay reveals that, against the revised estimate of Rs 12,632.80 crore for the current fiscal covering depreciation reserve fund, development fund, safety fund, special railway safety fund, open line works and metropolitan transport projects, the budgeted amount for the next fiscal is only Rs 11,949 crore - a shortfall of Rs 683.80 crore.
If the railways cannot provide higher outlay for vital operations such as development fund, safety fund and depreciation reserve fund for maintenance of assets and rolling stocks, how can the system's efficiency be enhanced to provide comforts to users, both individuals and industry?
The introduction of a premium registration scheme for exporters if they disburse freight at two classes higher than the prescribed class within the same class of priority might not only render non-premium customers at a disadvantage but also make the exporters' transaction cost higher, pushing them to rely on roads.
The Budget did not make any modest start to hive off non-core activities or even core activities for part-privatisation so that the Railways could be content manning the system, leaving commercial operations to private people on a cost-plus basis.
The entry of private operators in airlines, telecom, ports and roads with sufficient incentives has altered the scenario for users, but the Railways is still mired in a conventional mind-set of not ceding control to gain mastery over their assets for expansion and modernisation. Probably, the political will for reform is woefully lacking.
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