Oct 15, 2016

Railway Modernisation picks up steam after pressure from Prime Minister

Prime Minister Narendra Modi will hold a brainstorming session with railway officers next month where he will also be taking stock of various ongoing projects that which also include India’s first bullet train corridor between Mumbai and Ahmedabad.

New Delhi: Top railway officials to face the most difficult task in the last two years of the present government as they will be responding to some tough questions from Prime Minister Narendra Modi on improving the standards of Indian Railways. Modi will hold a brainstorming session with railway officers next month where he will also be taking stock of his dream projects that include India’s first bullet train corridor between Mumbai and Ahmedabad.
Top sources in the Railway Ministry said the Prime Minister’s meeting will be held in the third week of November though the date will be communicated by the PMO.

This has greater significance as PM Modi has been insisting on Modernisation of the Indian Railways with focus on high-speed trains, world-class railway stations and increasing revenue without putting burden on the passengers. For the cash-strapped railways, exploring new sources of fund, especially from the foreign countries, will be a daunting task.

“The railway board officials will give a detailed representation to the Prime Minister on measures to improve the functioning of railways. For this purpose we sought suggestions from 1.3 million railway employees. We will chalk out an action plan that will be presented before PM Modi,” said a senior railway board official.

Top bureaucrats are now busy collecting minute details related to major rail projects and also the steps taken to improve railways’ functioning. “Modernisation of railways, introduction of high-speed corridors, new world-class stations, punctuality of trains and cleanliness are the focus areas. The PM will be apprised of all measures taken in the last two years by the railways,” officials said. A well-placed source said the railway ministry will also be detailing the PM on new sources of revenue and funding for its ambitious projects. While the bullet train will be funded mostly by the Japan International Cooperation Agency (JICA), there is uncertainty over funding for other high-speed corridors.

Countries like France, Spain and Korea have shown interest in taking up railways’development projects in India but there is no final word on how these projects will be funded. Indian Railways requires huge investment to execute its projects which include diamond quadrilateral high-speed corridors and over 400 railway stations.

The high-speed corridors include Delhi-Mumbai, Delhi-Kolkata, Delhi-Chennai and Mumbai-Chennai among others. But the railways has been facing acute cash crunch and registering a loss of over Rs 32,000 crore annually.
Earnings fall short of target by over 11 per cent in September

To overcome its losses, the railways has also formed a directorate of non-fare revenue to mop up its revenue collection from alternative sources and tapping advertisement potential. Cutting down its expenses and commercial exploitation of railway properties is also a major concern of railway ministry. However, compounding the woes of railways, total earnings from goods and passengers fell by over 11 per cent from the target in September this year as against the last year for the same period, causing concern in the rail administration.

Railways have earned Rs 12,413.96 crore in September this year as against the target of Rs 13,961.91 crore for the month, a decrease of 11.09 per cent. The total earnings from goods in September was Rs 7,719.52 crore as against the target of Rs 8,564.27 crore, a decline of 9.86 per cent, according to Railway Ministry data. In passenger segment also the earnings are way behind the target as railways earned Rs 3,815.43 crore as against the target of Rs 4,253.71 cr, a decrease of 10.30 per cent. Passenger bookings were also fell short of target with total 683.17 million passengers booked in September as against the target of 686.61 million.

Railways has recently rationalised the freight rate to attract more loadings and introduced flexi-fare system in premier service including Rajdhani, Shatabdi and Duronto trains to shore up revenue collection. Admitting decline in revenue collection, a senior Railway Ministry official said, “There is a general decline in demand and it is a cause of concern. Several steps are being initiated to perk up the earnings.”

Railways has announced many ambitious projects including massive expansion and modernisation of rail network and the shortfall in earnings could cause problem in its future plan. However, the official said railways expect the volume of loadings to increase in coming months with the rationalisation of freight rate.