Title - Rail Budget 2013-14: Need to mobilise Rs 120,000 cr says expert

Sachin Bhanushali
Gateway Rail Freight

Indian Railways have been experiencing a roller coaster ride during the last few years. During the recent past the operating ratio has deteriorated from 78.7 % in 2006-07 to 95% in 2011-12. The staff cost has become a major hurdle in IR's progress as this has put a big strain on it's finances. The freight loading target of 1025 MT for FY 2013 is likely to be achieved. However, the resources required for modernisation and expansion of passenger and freight terminals and its network are not available. As mentioned in Vision 2020 document as well the Budget papers, there is a need to mobilise over Rs 120,000 Cr during the current plan period. Therefore, private participation in resource mobilisation will have to play a key role in IR's progress map.

However, Indian Railways have not shown an investor friendly attitude in its PPP initiatives. It's major initiative - the CTO sector, has suffered due to both tariff and non-tariff actions. As a result there is a complete lack of enthusiasm amongst the investors and lenders in investing in rail related projects. It's other initiatives such as Private Freight Terminals and Special Freight Train Operators have failed in attracting private capital in a big way.

Indian Railways should restore the investors' and entrepreneurs' confidence by undoing some of its recent actions - such as the 16 - 31% increase in rail haulage charges. The ministry will have to use Railway Budget to address IR's core issues such as mobilising resources, controlling costs and offering competitive freight structure with an environment friendly advantage to increase its share in the freight market.