2012 – A tough year for cash strapped Indian Railways.

Cash-strapped railways faced a tough year financially which was compounded by indecisions and policy delays as the national transporter witnessed four ministerial changes because of political compulsions.

While the Railway Ministry came to the Congress fold after a gap of about a decade-and-a-half after the withdrawal of Trinamool Congress support to UPA, the government looks set for a hike in passenger fares, which had remained stagnant over the years.

The railways witnessed a widening gap between operational cost and passenger earnings while freight revenue also fell below the target in 2012. Railways earned Rs 67,879.95 crore till October as against the target of Rs 70,147.74 crore, 3.23 per cent less than the budgeted provision.

In view of this shortfall, the plan outlay for the current fiscal has been downgraded from Rs 60,100 crore to Rs 55,881 crore.

Currently, the railways have 347 ongoing projects for new lines, gauge conversion and doubling but shortage of funds has forced curtailing of allocations for majority of them.

The year witnessed commissioning of the much-delayed Rae Bareli coach factory. Besides the factory, the railways also announced setting up of a wheel factory at Congress President Sonia Gandhi’s constituency.

The year began with Railway Minister Dinesh Trivedi proposing about 15 per cent passenger fare hike in the Rail Budget. However, it was rolled back as Trivedi drew the wrath of Trinamool supremo Mamata Banerjee.

Trivedi was aiming to mop up about Rs 4000 crore from the fare hike. He was, however, replaced by Banerjee loyalist Mukul Roy, who remained mostly absent from the ministry and ran the key infrastructure department for nearly seven months from Kolkata.

Though many West Bengal-centric projects including Kanchrapara rail factory, beautification of stations and opening of passenger reservation centres in the state were initiated during Roy’s regime, the much-needed move to hike passenger tariff was put in the back-burner.

After the withdrawal of Trinamool support in September, Congress’ C P Joshi was given additional charge of the ministry for about a month. His brief tenure saw the revival of the proposal for setting up of Rail Tariff Authority (RTA) to suggest tariff hike in passenger and freight rates.

Pawan Kumar Bansal, who became the fourth minister in a year to occupy the Rail Bhavan, has been giving ample hints of raising the fares realising the dire financial needs of the national transporter.

“If passenger fares will be hiked then it will not be for the sake of raising fares, it will be done to improve passenger amenities,” he had said after taking over in October.

Both ministers of State for Railways – Adhir Ranjan Chowdhury and K J Suryaparakash Reddy – have also strongly advocated raising of passenger fares to generate funds.

Reviewing the performance, Prime Minister Manmohan Singh has asked the railways to expedite the process of setting up the Rail Tariff Authority.

Singh has also asked the ministry to finalise bidding documents for two big ticket projects – locomotive factories at Madhepura and Marhora in Bihar.

Though seven routes have been identified for undertaking feasibility survey for running bullet trains at 300 kms per hour speed, the Mumbai-Ahmedabad route is to be taken up by the railways as a priority.


Railways to make existing schemes more attractive

Indian Railways is expecting a year-on-year revenue growth of 8-10 per cent, according to the Union Minister of State for Railways, K. H. Muniyappa.

The Minister , who was in Mangalore to flag off Yashvantpur-Mangalore-Karwar train on Thursday, said the need of the hour now is to get aggressive on market-focused public-private partnership (PPP) models, by engaging rail users in planning process for tailoring total logistics solutions.

The existing schemes for wagon leasing, sidings, private freight terminals and container train operations, and rail connectivity projects, will be made more attractive from the rail users’ perspective. This is because of the limitations of funding support from the Government and constraints with regard to internal generation and market borrowing, he said.


The Minister said the Railways’ Vision 2020 estimates a need for over 5,000 diesel and 4,000 electric locomotives over the next decade. Stating that this requires huge investments, he said the role of private sector and PPP, therefore, becomes pivotal.

A shift in cargo from roads to Railways will have a positive impact on energy consumption patterns and increase Railways’ competitiveness. In this regard, the second phase of the Rae Bareli coach factory will be commissioned in 2012-13. A wagon manufacturing unit in Orissa and three coach factories in different States, will also be set up during the current financial year, he said.

Indian Railways will provide bio-toilets in 2,500 passenger coaches. The Union Ministry of Environment and Forests has come forward to bear half of the cost of this project to retrofit all passenger coaches on the Railway system in the next five years.