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Monday, Aug 23, 2004

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Rlys charts course to absorb diesel price hike

Mamuni Das

New Delhi , Aug. 22

THE Railways has decided to absorb the recent hike in diesel prices. Instead of revising its fare upwards, the Ministry will take further measures to arrest expenditures and increase its earnings.

"The August diesel price hike of Rs 1.45 per litre will cost the Railways Rs 303 crore on an annual basis," the Railway Board Chairman, Mr R.K. Singh, told Business Line. This is over and above "the diesel hike in July of Re 1 per litre that cost the Railways Rs 202 crore, of which Rs 160 crore was accounted for in the Budget," he added.

The total fuel expenditure for the Railways has been budgeted at Rs 8,276.43 crore.

On any possible tariff review, since the Railways did not increase its passenger fares and freight charges this year, he said the Ministry is taking steps to maximise earnings and minimise expenditure.

Among other steps to minimise expenditure, it plans to decrease its energy and fuel expenditure by trying to purchase electricity directly from the National Thermal Power Corporation (NTPC) instead of State electricity boards (SEBs). "While the SEBs charge Rs 5.40 to Rs 6 per unit on an average, NTPC charges Rs 2.60 per unit. For one megawatt of direct supply, the Railways ends up saving Rs 1 crore a year," said Mr Singh.

Asked about the Railways' plans to set up a captive power plant, he said work is in progress to set up a 1,000-MW power plant in Nabinagar. It is also taking steps to ensure better inventory control and right size its employees, he added.

Mr Singh said the Railways has now started acquiring modern rolling stock that require maintenance once every two years compared with a maintenance every year for its earlier rolling stock.

In order to maximise earnings, the Railways is trying to get more volume on freight. It aims to reduce "free time" on these trains to 2-3 hours from the present level of 7-10 hours. By doing so, it is ensuring that the trains are in use for a longer duration. "We are debiting and crediting the users based on their increase or decrease (respectively) in loading time," he said.

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