Sep 29, 2016

IR to join $-billion Cargo Club soon: Suresh Prabhu at SBI Economic Conclave

Railway Minister Suresh Prabhu today exuded confidence that the national transporter will soon join the billion-dollar cargo club as it is on course to ferry 1.2 billion tonne of cargo.
New Delhi: Railway Minister Suresh Prabhu today exuded confidence that the national transporter will soon join the billion-dollar cargo club as it is on course to ferry 1.2 billion tonne of cargo. “Railways is targetting to carry 1.2 billion tonne of cargo this year and will be join the billion-dollar cargo club soon, which has only five countries,” Pradhu said at the SBI Economic Conclave today.

The Minister said this is despite that decades of underinvestment in improving capacity. “From 90 per cent of Railways’ finances coming in from freight, it has been coming down steadily over the past 60 years,” he said.

Even today, the Railways earns more than 70 per cent of its incomes from freight, around 20 per cent from ticketing and the rest from rentals.

As per the Rail Budget 2016, the freight revenue of the railways hit a five-year low in 2015-16. Revenue in 2015-16 increased 4.6 per cent, much lower than the 10-19 per cent growth it had registered in the previous four fiscal years.

Freight volume rose just 0.6 per cent for the year, compared with 4-5 per cent growth in the previous four fiscal years, thanks to the subdued economic activity.

The passenger business didn’t do well either. Passenger bookings fell 0.9 per cent and while revenue form this side grew 5.9 per cent in the year.

Stating that he is working on to reverse the decades of underinvestment in the rail freight infra side, the minister said since he assumed office, the Railways has undertaken as many as 104 reforms.

Noting that more than two-thirds of the revenue comes from freight, of which 50 per cent come from coal, he said there is an urgent need to “diversify the freight basket, and reduce the reliance on coal.”

Listing some of the reforms he has initiated on this front, he said he has “reduced the freight rates on many items, and have also done away with port congestion and handling charges. We are working towards a completely market friendly approach towards freight. Freight share cannot be increased without being market oriented.”

Admitting that many rail projects are stuck mostly for want of funds, he said a whopping “Rs 6.5 lakh crore worth of railway projects languishing. We are working to significantly improve this, and by 2020 I hope to end the waiting for capacity augmentation. I hope to reduce congestion and significantly increase capital expenditure.”

Promising more transparency in the functioning of the railways, he siad he is also looking at bringing in more accountability and transparency to the system.

“In the next few months, we are working towards bringing paperless contracts. The Railways is working to put everything into public domain to ensure accountability.”