The Hindu Business Line : A neat somersault

A politician with pro-poor image who last year agitated in West Bengal on the issue of land acquisition for industrial projects, Ms Mamata Banerjee, the Railway Minister, has done a neat somersault on exploiting railway lands for commercial purposes.

Ms Banerjee’s proposals for construction of multi-functional complexes in stations with substantial space, and an Eastern Industrial Corridor alongside the Eastern Dedicated Freight corridor, making use of the Railways’ land-banks are two instances in this regard.

As it is, railway land measuring about 1,042 hectares is under encroachment by 1.42 lakh encroachers.

In February, the former Railway Minister, Mr Lalu Prasad, conceded in the Lok Sabha that the Railways faces problems in the use of such encroached lands for development/expansion projects and for its operational use.

Now, with Ms Banerjee proposing to use these lands for commercial purposes, evicting the illegal encroachers might dent her image as a saviour of the landless.

Land exploitation

Though land exploitation for commercial use was talked about in the 1990s by Mr Jaffar Sharif when he was the Railway Minister, the Rail Land Development Authority (RLDA) was set up only in November 2006.

It became functional from January 2007, undertaking all tasks pertaining to property development on railway lands.

How far and fast the RLDA will go about inviting investors to develop these commercial centres is open to doubt, given the lack of functional autonomy of the Railway Board.

Ms Banerjee has harped on the need for ‘inclusive’ growth and maintained that she would come out with a blueprint to develop regions devoid of any infrastructure development.

She announced the setting up of an expert committee to suggest innovative financing and to implement ‘economically unviable’ but socially desired projects.

This intention is laudable, though the Railways’ dependence on budgetary support has been dwindling while its borrowings through the Indian Railway Finance Corporation (IRFC) are mounting year after year.

With its avenues for revenue generation through adjustment of passenger fare and freight rates being closed year after year on political considerations, the ability to finance even basic passenger amenities such as clean toilets and water supply, is a huge challenge.

Passenger amenities

The latest Yearbook of Railways shows that against an allocation of Rs 215.09 crore on passenger amenities in 2007-08, the actual expenditure incurred was Rs 183.31 crore.

The Minister might take pride in declaring passenger amenities would be her “priority” areas but action on these fronts may not be a priority for legions of railway employees.

Unless a fundamental shift in attitude to amenities for users is inculcated, with strict monitoring and penalties for negligence, the system will remain impervious to the occasional pious declarations on this score.

The operating ratio, an index of efficiency, projected for the current fiscal at 92.5 per cent, reflects inefficient utilisation of resources, men and material.

Interestingly, under working expenses, fuel costs for the Railways is pegged at Rs 14,713.19 crore for 2009-10, while in the interim budget announced in February this was at Rs 14,913 crore.

In the meantime, the government actually hiked the diesel price by Rs 2 per litre on July 1. How the fuel cost could be lower than indicated in the interim budget passes comprehension.

Similarly, the outlay for the Depreciation Reserve Fund is down from Rs 7,000 crore to Rs 5,325 crore now.

How can the system’s rolling stock maintenance cost be lower, particularly when the stocks are being overused to ensure high volume of traffic?

The Rail Budget thus does not reckon with the long-term damage such complacent accounting systems may inflict on a mode of transport that carried 18 million passengers and 2.18 million tonnes of freight each day on its 63,273 route kilometres in 2007-08.