Railway Budget to announce more freight corridors

10 Nov

Hectic preparation has begun for 2016 rail budget, whose mantra will be to declog railways by decongesting overworked trunk routes. It will also shun populism like announcement of new trains in view of choked railway network.

“What is the use of announcing new trains (as in the past), when railways have no route capacity. We want to decongest railways first,” Railway minister Suresh Prabhu in a free-wheeling chat said indicating the rail budget in 2016 will shun populism just as this year with special emphasis to fix the chronic problem of congestion by stepping up investment. Also one need not always announce new trains only in budget. As and when capacity improves and increases, new trains would be introduced as per requirement.

For example Mughalsarai-Allahabad stretch is so overworked and it needed to be first decongested before introducing more trains on the route, Prabhu said.

Prabhu was not oblivious to the demand for more trains but for that capacity has to be created and that is the priority of the railways now. However the Railways have stepped up passenger carrying capacity during the last one year by adding more coaches to the existing trains. This has helped in stepping up passenger carrying capacity by 30-40 per cent in some routes without adding new trains particularly in sleeper classes in choked sectors.

The rail budget is also likely to announce expansion of dedicated freight corridors in the country. The railways have already started implementing Delhi-Mumbai and Ludhiana-Kolkata freight corridors. The railways are spending Rs 82,000 crore for implementing these two sections through a special purpose vehicle. JICA and World Bank are providing part of the funding and 85 per cent of the land for the two sections have already been acquired.

Prabhu said the freight corridor project completion has been advanced by a couple of years to 2017 to decongest these two high density routes. Once completed railways will be able to run goods train with a schedule and will provide more capacity to run passenger trains with higher speed on the existing lines. At present there is no time schedule for goods trains.

There are indications that at least two more dedicated freight corridors are expected to be announced in the budget. The railways has almost completed feasibility study of four more dedicated freight corridors, connecting Delhi-Chennai, Chennai-Kolkata, Chennai-Goa and Mumbai-Kolkata.

Railways would soon be announcing an independent authority, which is an improvement over the rail tariff authority that would look into passenger fares, freight and monitor efficiency. The authority would do the cost benefit analysis of various routes and fix freight and passenger fares accordingly. The significant aspect is that it will take into account efficiency in determining freight charges and passenger fares.

This body is being given final shape and will be announced soon much before the next budget. Another priority area for railways in the next budget is going to be stepping up electrification as a measure to reduce dependence on fossil fuel. This would not only help railways go green but also save on fuel cost. Despite fall in global crude oil prices, the railways still spend Rs 22,000 crore on diesel alone this year.

The railways proposed to take up 10,000 route km of electrification in the next three years, which when completed will help in saving in fuel cost of at least Rs 5000 crore annually.

India had only 380 route km of electrified railway track at the time of independence. By 2014, it had gone up to a little over 25,000 km. The NDA government proposed to add more than one third of the number in just three years. Prabhu feel electrification is a priority for railways as the rate of return on investment is one of the highest and payback time is short.

Prabhu is keen to make railways more and more green. Electrification is a step in that direction. Railways has also proposed to play a role in solar power generation by taking up projects in various stations and elsewhere. It would leapfrog in solar power generation from the present 5MW to 1000 MW in three years. It is proposed to have rooftop solar power in railway stations and already a beginning has been made in Katra station in Jammu. It has also set up a 25MW wind power generation in Rajasthan.

Railways proposed to spend Rs 8.5 lakh crore on modernisation of railways in the next five years. Though there is no dearth on availability of funds, the railways would have to adopt innovative funding as it cannot solely depend on internal resource generation through fares and freight and budgetary support.

Life Insurance Corporation would provide Rs 1.5 lakh crore funding, of which first tranche of Rs 2000 crore was secured recently. Commercialisation of railway property could be one of the innovative funding of railway modernisation. Foreign direct investment is expected to pour in modernisation of railway stations apart from major real estate developers and domestic construction companies At least 417 stations have been identified on which work is expected to start next financial year. 5-6 stations including Anand Vihar in Delhi and couple in Gujarat, the work would start this financial year itself.

Port connectivity would be another area railways would concentrate. There are already some projects have been taken up under PPP mode in Gujarat and Maharashtra and more such projects would be taken up as they are money spinner for the railways, Prabhu indicated.

Prabhu said he did not believe in announcing projects for which there is no funding. Several such projects have been announced in the past including several rail coach factories and very few have come up.

Now states were coming forward to set up railway projects in their respective states. Seventeen states have so far shown interest in signing MOUs with railways on cost sharing basis. Maharashtra, which was the latest to join the bandwagon was willing to invest up to Rs 10,000 crore, which meant at least Rs 50,000 crore more could be leveraged for such rail projects in the state.

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Posted by on November 10, 2015 in Uncategorized


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