INDIAN RAILWAYS HOMEPAGE
Railway status paper asks passenger fare hike to ease freight tariff
Railway minister Nitish Kumar presented the status paper in the Lok Sabha on Wednesday, May 27
The major points:
- Need for a phased increase in passenger fares to ease freight rates, massive cross-subsidisation of passenger fares by freight services is causing a loss of freight traffic to trucking. Annual cross-subsidisation was Rs 2,800 crore during 1997-98
- The railways will have to double their investment from the level of Rs 33,000 crore in the Eighth Plan to Rs 85,000 crore in the Ninth Plan to retain the present share in transport.
- The paper seeks power for electric traction on low tariffs, currently being supplied at three times the generation cost.
- It also demands that facilities like inland container depots (ICDs), set up by Concor, be treated at par with ports and given benefits under the Income Tax Act.
- The paper also seeks government approval for commercial exploitation of railway land and air space to upgrade passenger and freight terminals and also a supplementary source of funding for railway development.
- The paper suggests the creation of a development fund for rail over- and road under- bridges through one per cent ad valorem levy on purchase price of road vehicles.
- It seeks compensation for public service obligations, like running unremunerative passenger and commuter services and carrying essential commodities at subsidised rates, currentlycosting Rs 1,800 crore for commercially unviable but socially relevant projects, the paper suggests funding through outright grants without dividend liability for execution and operation of such projects.
MAJOR FARE HIKE COMING?
Speculation abounds regarding the new rail budget. Obviously the new budget won't be able to support the past rate of new construction and guage conversion done for political purpose, but the real question is whether passenger fares will be raised substantially. International lenders such as World Bank would like to see Indian Railways change to a more commercial basis. The subsidization of passenger service with freight revenue seems to be contrary to what international lenders want to see.
UNIGUAGE A DISASTER? The project to convert all of India's Railways to one guage (Broad Guage: 5 feet 6 inches)may have been a sensible well
intentioned plan at the time of conception, but now many years later questions are being raised.
Should Uniguage take priority over overall capacity improvement and system safety? Is the laying of new track alongside an older meter guage line using up resources that
are needed to upgrade major trunk routes ? Will container trains make guage change irrelevant for freight cargo? Will passengers really benifit from the guage changes on relatively minor lines?
See what the Buisness Standard has to say about Uniguage
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