The Hindu Business Line : A beginning to improve stability with diversified goods traffic

If the Railways were to really enter into big business such as developing high-speed passenger corridors through public-private partnership, the incentives that are to be deployed need to be reasonably attractive.

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New Delhi Feb. 26 Predictably, the Railway Minister, Mr Lalu Prasad, has adroitly presented a fourth budget of the UPA Government, keeping the interests of aam admi by not revising the passenger fares but went to an extra mile to effect some modest cut in train fares, even as he persists with his freight rationalisation programmes that had earned him plaudits over the years.

With route length covering 63,332 km and running track of 84,370 km, the Railways was able to generate a cash surplus before dividend of Rs 20,000 crore this fiscal, thanks to their new-found faith in volumes both passenger and freight, even as there has been sporadic attempts to maintain fares by not revising them for a couple of years.

No wonder, the bucolic Mr Lalu was able to gloat over that "our turnaround strategy based on a perfect blend of commercial wisdom and empathy for the people has made the railways a centre of attraction for the world".

As the Railways earns 90 per cent of its freight business from transportation of a few select commodities, this budget has made a beginning to broad base its business and improve stability in the growth rate by seeking to diversify and increase the mix of carried commodities.

That is why the Railways is emboldened to declare that they are targeting a freight loading of 1,100 or 1,200 million tonnes and passenger traffic of 840 crore by the terminal year of the Eleventh Plan (2011-12).

It makes one wonder to hear that in order to make this unprecedented growth a reality, the Railways has to gird its loins in the next few years to expand transport capacity, bring down unit cost by playing the volume game and provide customers with world class services.

How the Railways would be able to garner resources estimated to cost a colossal Rs 2,50,000 crore in the next quinquennium is a riddle, given the monolithic structure of this arterial mode of transport that is still managed by mandarins from Rail Bhawan with the public sector mindset with warts and all.

With the successive Railway ministers taking perfunctory steps in privatising several areas of rewarding nature, including the sale of surplus lands vested with the system for commercial operations, the time has now come to act for the Railways on the lines recommended by the Rakesh Mohan Committee report in the early years of this decade.

The actual plan outlay of the Tenth Plan (2002-07) is likely to be above Rs 82,000 crore, including a much higher level of internal generation of over Rs 28,000 crore, market borrowings of above Rs 16,500 crore and a gross budgetary support of Rs 36,900 crore, including contribution to the Special Railway Facility Fund. Considering this actual plan size of the Tenth Plan, the Eleventh Plan investment proposals as laid out by the Railways in its ambitious plan to modernise and upgrade technology to improve the efficiencies and reduce the unit cost of transport would be almost double or treble in each components of the programmes.

Will the Railways be able to deliver what they have grandly laid out for the next five years is a moot point, given the ostrich-like attitude of the successive railway ministers not to shed core areas of its operations for private participation.

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