Bold reforms, tariff authority proposed in interim Rail Budget

NEW DELHI: The interim Railway Budget for 2014-15 today contained reforms proposals for opening the sector to domestic and foreign investors and a tariff authority to rationalise fares and freights, end cross subsidisation and enlarge the dynamic fare scheme.
The vote-on-account Budget, presented by Railway Minister Mallikarjun Kharge, do not contain any revision of fares and freight rates in keeping with the tradition of not tinkering with them since it is for the first four months of next fiscal.
The Budget proposed introduction of 18 new premium trains, 38 express trains and 5 passenger trains.  Kharge, who took charge of the ministry after the exit of Pawan Kumar Bansal eight months ago, said apart from attracting private investment from domestic sectors, a proposal is under consideration to enable foreign direct investment ( FDI) to foster creation of world-class rail infrastructure.
He said an independent Rail Tariff Authority is being set up to advise the government on fixing of fares and freight rates.
“This would lead to an era of rationalisation of fares and freight structures for improving the fare-freight ratio and gradually bringing down cross-subsidisation between different segments,” said the Minister who had to cut short his speech and lay it on the table admist din over Telangana issue.
The Minister also announced starting of more high-speed trains and said the Ministry was exploring low-cost option of semi high-speed trains on select routes moving at 160-200 km per hour.
The annual Rail Plan has been pegged at Rs 64,305 crore with a budgetary support of Rs 30,223 crore.
Referring to the premium AC special train introduced on Delhi-Mumbai sector with shorter advance reservation period, Kharge said, “The fare charged includes a dynamically varying premium over Tatkal fare of Rajdhani services.”
“Such dynamic pricing was widely appreciated by the users … we are considering operation of this scheme on a larger scale,” he said.
Kharge said projects in pipeline involving private partners through public-private partnership (PPP) route related to rolling stock manufacturing units, modernisation of railway stations, multi-functional complexes, logistics parks, private freight terminals, freight train operations, liberalised wagon investment schemes and Dedicated Freight Corridors.
The Rail Land Development Authority, set up with a “challenging target” of Rs 1,000 crore, had already raised Rs 937 crore, he said.
Announcing that the governments of Karnataka, Jharkhand, Andhra Pradesh and Haryana had agreed to share cost of several rail projects, Kharge appealed to other state governments to follow suit to create rail infrastructure in their respective areas.
A joint feasibility study for Mumbai-Ahmedabad high-speed corridor, co-financed by the Railways and Japan International Cooperation Agency, which started in December last year, would be completed in 18 months, he said.

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