Rlys to borrow Rs 15,103 cr for 2013-14

Indian Railways will go in for market borrowing of Rs 15,103 crore in 2013-14 to part finance its highest-ever planned investment of Rs 63,363 crore proposed for the next fiscal.

This borrowing will be done through the Indian Railway Finance Corporation (IRFC), which is the market borrowing arm of the Railways.

Besides the market borrowing, the plan is proposed to be financed through gross budgetary support of Rs 26,000 crore, the Railways’ share in the road safety fund of Rs 2,000 crore and internal resources of Rs 14,260 crore, Rail Minister Pawan Kumar Bansal said on Monday. The Railways is also expected to mobilise Rs 6,000 crore through the public-private partnership route, Bansal said in his speech.

For 2012-13, the Railways had targeted market borrowings of Rs 15,000 crore through IRFC. Of this, IRFC had, till mid-February this year, mobilised about Rs 8,150 crore, which comprises tax-free bonds of Rs 6,500 crore and external commercial borrowing of Rs 1,650 crore.

For the balance, Rs 6,800 crore, IRFC is likely to use options such as term loans and the external commercial borrowing window, Rajiv Dutt, IRFC Managing Director, said recently.


Railways left to fend for themselves

The Railways have been left to fend for themselves as a result of which the plan expenditure for 2013-14 has been pegged at Rs. 63,363 crore, just marginally more than the budget estimate for 2012-13 of Rs. 60,100 crore, which was revised downwards to Rs. 52,265 crore.

One of the reasons for the far from robust outlay is that the gross budgetary support is only to the tune of Rs. 26,000 crore, which was up by a meagre Rs. 2,000 crore from the allocation in 2012-13.

The crucial point about the projected plan expenditure is that it is banking upon a contribution of Rs. 6000 crore through the PPP route. Only time will tell if that gets realised.

The Railways are expecting their share of Rs. 2000 from the Road Safety fund, generate internal resources of Rs. 14,260 crore and raise money from the market to the tune of Rs. 15,103 crore.

How bad the railways are placed could be gauged from the fact that they intend to construct only 500 km. of new lines, 750 km. of doubling of lines and 450 km. of gauge conversion.

In 2012-13, construction of new lines was scaled down from the targeted 700 km. to 470 km., similarly gauge conversion too was scaled down to 575 km. from the target of 800 km. Only in the case of doubling the target of 700 km. will be exceeded marginally during the current fiscal.

Therefore it is not surprising that the fund appropriated to the Railway Development Fund has been slashed to Rs. 3,550 crore only for 2013-14. In 2012-13 the allotment was Rs. 10,557 crore, but revised downwards to Rs. 9,984 crore.

All this despite passing through the hike in diesel prices and electricity charges to the freight consumers and the promise to revise fares and freight charges at least twice a year to take care of possible hikes in fuel charges. Another hike could be expected in October perhaps.

During the current financial year, the failure to meet the goods and passenger targets led to a shortfall in revenue to the tune of Rs. 3,383 crore and 3,573 crore respectively for a total of Rs. 6,953 crore.

As a result of this the accounts have been revised to show a surplus of Rs. 10,409 crore from the projected Rs. 15,557 crore. This surplus has been managed by paying lower dividend and cutting down appropriation to the development fund by Rs. 4,574 crore. Only a dividend of Rs. 5,314.05 crore will be paid during the current fiscal instead of the targeted 6,650.34 crore.

Nevertheless, the Railways claimed they had brought the operating ratio down to 88.8 per cent during the current financial year and improve it to Rs. 87.8 crore and have a fund surplus of Rs. 12,000 crore.

The Ministry hopes to transport 1,047 million tonnes of freight, about 40 million tonnes more than this year while passenger growth is pegged at 5.2 per cent. The gross traffic receipts are expected to be around Rs. 1.43 lakh crore in 2013-14.