Regulator must be allowed to revise rail tariffs to let the railways modernise

Railway minister CP Joshi has promised the creation of a rail tariff authority. The important reform will improve the deteriorating financial health of the Indian Railways (IR) and is, therefore, welcome. The proposed authority must be truly independent and empowered to revise tariffs, not just recommend revisions so that the Railways do not have to move Parliament to change passenger fares and freight rates.

The point is that the political class must stop looking at the IR as platform to shower patronage. Periodic adjustments in tariffs, based on actual costs, will end the practice of freight and upper class fares subsidising lower class fares. It is heartening that the minister wants to implement recommendations of the Sam Pitroda panel on modernisation.

Reforms are needed on many fronts to reenergise the IR. One, it needs to make massive investments to modernise electronic signaling, especially for high-speed operations. There is no reason why tracks should remain idle, say, on Rajdhani routes. Synchronised, computerised signalling will ensure that tracks are constantly used. Two, the IR also should invest in electrification and strengthen track infrastructure to move higher loads and allow for safe and high-speed operations.

Three, it should move coal and cargo more efficiently as their requirement will rise significantly when investments pick up and the economy grows. Coal must be hauled from the pithead to power plants only after beneficiation or removing non-combustible shale and rock.

Four, the IR should buy more rolling stock and improve wagon turn-around time. It should add capacity to remove the shortages created in passenger reservations that lead to rationing. This requires investments in new coaches and trains.

Five, the IR also needs to build dedicated corridors for high-speed passenger trains for inter city connectivity. Six, it should involve the private sector, in a big way, to step up freight volume and revenue. Rightly, a panel chaired by Deepak Parekh has recommended private public partnership initiatives to mobilise massive investment. IR must accelerate reforms.

Published in: on October 14, 2012 at 4:28 am  Leave a Comment  
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