Tariff authority, pvt investment on railway reform agenda

Winds of reforms are finally set to reach the railways with the ministry placing two reformist proposals before the Cabinet.

The new railway minister C P Joshi said the ministry has in principle agreed to form the Rail Tariff Regulatory Authority. The Cabinet is considering another proposal to allow private investment in last mile rail connectivity projects.

“The railway passenger and freight tariff needs to be insulated from inflation and other input cost increase. The Cabinet has yet to approve of this authority. But we are in principle agreement of such an authority. The authority will study the gap between the actual costs of a service and the earnings out of it,” Joshi said at the Economic Editors’ Conference in New Delhi.

The minister, however, did not reply to a specific query on whether the railways would go for an out-of-budget increase in passenger tariffs like the freight hike this year. He said an in-principle approval for the authority was already in place.

Joshi said it is not yet decided as to whether the role of that authority would be advisory or not.

The government will place before the Cabinet the Electronics Policy in the next two weeks that aims to give a boost to local manufacturing of electronic products. “The Electronics Policy will be brought before the Cabinet in the next two weeks,” Telecom Minister Kapil Sibal said at the Economic Editors Conference here. He added that if domestic manufacturing of electronic products is not encouraged, the extent of imports of such products will be about $300 billion by 2020.

Another area of focus would be to attract private investment in the last mile connectivity projects of railways. “There are lot of mining projects in states of Chhattisgarh, Jharkhand and Odisha and just because of lack of rail connectivity in the last mile, the rail loses market share to the road,” said Vinay Mittal, chairman of Railway Board. The Cabinet is likely to approve private investment in last mile rail connectivity projects next month.

The railways had in the 11th Plan managed to get only Rs 8,000-10,000 crore in private investment, but is now aiming for Rs 1 lakh crore from public-private partnership (PPP) projects to help fund its Rs 5,19,000 crore 12th Plan expenditure.


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