NEW DELHI: Railways Minister Suresh Prabhu had begun his maiden budget speech with humour. “Hey Prabhu yeh kaam kaise hoga?,” he said, using a pun on his name. Prabhu was seeking God’s help to achieve the task. God hasn’t answered his prayers yet. Prabhu plans to reform Indian Railways and get private funding to fix the various problems. The ailing public behemoth has hit a roadblock with 77 priority projects worth over Rs 96,000 crore stuck due to internal procedures. The roadblocks are not letting the work to begin. The state-run transporter is now struggling to find a way out. These projects are important for improving rail connectivity to metros, decongestion of busy rail-routes and generation of revenue for cash strapped railways.
Currently, Indian Railways runs over 13,000 trains daily on 66,000 km of track spread all over the country. Through these 77 projects, Railways plans to carry out around 9,000 km of doubling, tripling and quadrupling works along with their electrification. It will be nearly 15 per cent of the existing. Railways is expected to record an increase of Rs 25 crore in passenger-traffic in the next fiscal year and 17 per cent jump in earnings from the fare. With projects stuck, the future expansion is bound to be hampered.
Since taking over as railways minister in November 2014, Prabhu has focused on two key areas. These include improving passenger services and financial health of railways. Things seem to have come to a standstill. The priority projects are stranded. Top railways officials are putting their heads together to find a solution. The projects were announced in the Rail Budget after an expert committee determined them to be taken on priority basis. Interestingly, the funding of these projects has to be through extra budgetary resources. The Life Insurance Corporation of Indian (LIC) has already pledged Rs 1.5 lakh crore in the next five years.
Railways is supposed to prepare a detailed project report of the survey and design of the 77 projects with exact costs. It wants to know if the projects will be viable as they will be borrowing money from the market. Nearly 2 per cent of the money is spent for preparation of the detailed report. Railways is struggling to get this money. After detailed reports, all these will go to the Niti Aayog and Cabinet Committee on Economic Affairs (CCEA) for approval.
“Earlier, we used to get money for projects from the budget. The detailed report was based on rough estimates. For the first time, railways will be borrowing money from the market at an interest of something around 8.5 per cent. We need to have the exact cost of the project and viability before we approach CCEA and Niti Aayog for approval. We don’t want to take money from market and invest on projects which are not viable and turn out to be debt for us,” said a railway ministry official.
Of the 77 projects, railway has preliminary report of alignment of 38 projects. Survey is in progress for 23. No survey has been done for 16. Actual cost of the project cannot be assessed based on the preliminary report. There is a need for detailed reports. According railway officials, Prabhu wants work to start on all the 77 projects within six months. It is not possible before the exact cost of each project is determined. “We are thinking of ways to get the money to kick start work. One possible option is that these projects are put in front of CCEA in clusters so that they can be cleared fast,” the officials added. In a bold move, Prabhu refrained from announcing new trains and new rail line projects in the budget. He wanted to focus on over 360 projects pending for 30 years and capacity- enhancement of existing infrastructure. The idea was to have projects viable for railways and not out of political compulsion.
He sanctioned 77 projects covering 9,400 km of doubling, tripling and quadrupling works along with their electrification at a total cost of Rs 96,182 crore which is over 2,700 per cent higher in terms of amount sanctioned in 2013-14. The railways got the highest ever budgetary support of Rs 100,011 crore for 2015-16, an increase of 52 per cent over revised estimate of 2014-15. The largest chunk of the budgetary share was allocated for improving passenger services.