Rail budget proposes FDI, private investment, PPP projects

Having already effected a steep hike, the railway budget for 2014-15 spared passengers of any fresh revision in fares and freight rates but pitched for reforms by proposing private and Foreign Direct Investment and Public Private Partnership (PPP) to meet the resource crunch.

Presenting his maiden budget for 2014-15 in the Lok Sabha, Railway Minister Sadananda Gowda said he plans to leverage railway PSU resources by bringing in their investible funds in infrastructure projects.

The pre-budget hike of 14.2 per cent on fares and 6.5 per cent on freight rates announced on June 19 will fetch Rs.8,000 crore, he said. The roll back of proposals on monthly season tickets would involve a sacrifice of Rs. 610 crore.

Gifting Prime Minister Narendra Modi's home state Gujarat, he announced plans for introduction of a bullet train in Mumbai-Ahmedabad sector which will cost Rs.60,000 crore.

Gowda said the budget seeks course correction in the light of mismanagement, apathy, populism in starting projects and severe fund crunch that have inflicted the railways over the years.

In his post-budget briefing, Gowda said the railways would continue with the Fuel Adjustment Costs (FAC) formula under which there will be periodic hike in fares and freight rates once in six months.

He said faced with resource crunch the government proposed to attract private and foreign investment to tide over the situation.

"We need huge investment for running bullet train. There was a ban on FDI in railways.  Now we would request Commerce Ministry to delete that clause so that there can be FDI in infrastructure development," the minister said adding the Cabinet has to take a call.

Asked at his briefing as to what is the cap the railways would like on FDI,  Railway Board Chairman Arunendra Kumar said "we would like it to be 100 per cent."

For this, structural reforms will be introduced and resources will be mobilised through PSU surplus, FDI and PPP, he said amidst shouts from the opposition that "this is a budget of Ambanis and Adanis".

"How long can I depend only on hiking fare and freight rates and burden the public to realise these funds?," he told the house adding, "this is unrealistic.  Thus, I need to explore the alternate means of resource mobilisation."

Apart from leveraging railway PSUs to bring in investible surplus funds in infrastructure projects, Gowda his ministry is seeking Cabinet approval to allow FDI in rail sector except in operations.

Adopting the PPP route for raising resources, he said "it is our target that bulk of our future projects will be financed through PPP mode, including the high-speed rail which requires huge investments."

Increased passenger amenities, more safety measures, timely completion of projects and increased financial discipline are among the highlights budget.

The budget proposes multi-pronged approach to make Railway journey safe and secure and comfortable for passengers.

More thrust has been placed on passenger amenities, cleanliness and efficient station management.  Now all major stations will have foot-over bridges, escalator and lifts.

On safety and security, the budget has proposed introduction of advance technology for rail-flaw detection to check causes of accidents, a significant amount of Rs. 1,785 crore has been earmarked for building road-over and road-under bridges.

The budget proposes that a pilot project will be launched on automatic door closing in mainline and sub-urban coaches.  In order to make women safer while travelling, the Railway will recruit 4000 women constables.  Coaches for ladies will be escorted.
IT initiatives get a big boost in the Budget. Revamping Railway Reservation System into Next Generation e-Ticketing will be taken up with provision of platform tickets and unreserved tickets also over internet.

The Railway has proposed real-time tracking of trains and rolling stocks, mobile based Wakeup Call System for passengers, mobile based destination arrival alert and Wi-fi Services in A-1 and A category stations and in select trains. Indian Railways has also planned paperless offices in 5 years.

In order to make Railway management more efficient, Budget has proposed setting up of Railway University for training in both technical and non-technical subjects besides establishing Innovations and Incubation Centre to harness the ideas generated from staff.

In a bid to modernise Indian Railway network, Bullet train has been proposed on Mumbai-Ahmadabad sector besides increasing speed of trains to 160-200 kmph in select 9 sectors.

The Railway has also planned setting up of Diamond Quadrilateral Network of High Speed Rail connecting major metros and growth centres of the country.

Identified stations will be developed to international standards with modern facilities on lines of newly developed airports through PPP mode.  Railway has also proposed harnessing solar energy by utilising roof top spaces of stations, railway buildings and land.