Involve Private Sector in Rail Development

Published: 18th June 2014 06:00 AM  |   Last Updated: 18th June 2014 02:03 AM   |  A+A-

Railway minister D V Sadananda Gowda has done well to indicate his plans to go slow on new rail projects. Though he is new to the job, he knows the railways rather too well, as his own brother is a station master in his home state. The railways will take up a new project only if the state government concerned is ready to share the cost. He has only his own predecessors to blame for his present plight. His ministry needs tens of thousands of crores of rupees to implement the various new projects announced by successive railway ministers. The fact is that the railways do not have enough money even to complete the projects which have already been initiated.

Under the circumstances, Gowda would do well to announce a complete freeze on new rail projects, which will also free him from political pressures. The freeze should apply to not only the coming budget but also to several ones after that. Needless to say, he needs to improve the railway finances. Given the pitiable condition of railway services, more and more people are opting for road and air services. Against a targeted passenger ticket revenue of `42,210 crore in the last fiscal, the actual earnings were just `37,500 crore. With losses in passenger services rising five-fold over the last 10 years, the Indian Railways are in a fix.

Even in freight traffic, the railways are increasingly facing challenges from the road sector. Even a politically infeasible 50 per cent hike in passenger fares will fetch the railways just `15,000 crore, as compared to its needs of around `14 lakh crore for capacity expansion of even the most basic kind by 2020. Given the state of affairs, Gowda should come out with a larger road map of how the private sector would be involved in the rail sector. This requires not only the government’s commitment but also the services of a regulator who would take care of the concerns of the private players. Given prime minister Narendra Modi’s thrust on infrastructure, the railways really need to get their act together.

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