March 21, 2002

    Some of the Railway projects have not been supported by the Planning Commission because the financial returns on such projects are expected to be either low or negative. While Railways keep in view the aspect of financial returns from investments on project, some of financially unremunerative projects are taken up on considerations of social desirability or of operational convenience.

    Planning Commission have also expressed concern over the large shelf of Railway projects resulting in a thin spread of resources and leading to cost and time overruns in project execution, adversely affecting the returns from investments. They have suggested that the projects should be prioritised for more productive use of resources. Railways have prioritised the ongoing shelf of projects on the basis of their physical progress and their operational importance.

    Some of the strategies recommended by the Planning Commission for the Railways are as follows: -

1. Capacity augmentation on the High Density corridors, particularly the Golden Quadrilateral;
2. Rationalisation of tariff to reduce cross subsidisation;
3. Decreasing the speed differential between trains by raising the speed of freight trains to 100 KMPH.
4. Setting up ICDs to facilitate intermodel transport.
5. Creation of warehousing facilities;
6. Indexing Railway fare and freight to increase in costs;
7. Phase out subsidies;
8. Harnessing private sector participation in Railway projects; and
9. Restructuring Railways to focus on its core business i.e. running of transport services on commercial lines, while spinning off non-core/peripheral activities into independent cost and profit centres.

Some of the steps taken by the Railways in this regard are as follows:

1. Railways are formulating a comprehensive plan for augmenting capacity on the high density corridors on the Golden Quadrilateral;
2. Steps have been initiated to rationalise fare and freight to some extent. Railways will endeavor to further rationalise the fare and freight to reduce the incidence of cross subsidy;
3. Steps have been initiated to reduce speed differentials between trains by raising the speed of some freight trains to 100 KMPH.
4. CONCOR is being given the required support to facilitate intermodal transport. Pipavav Rail Corporation Ltd. has also been recently permitted to enter into container transport business.
5. In order to augment the resource base, not only participation of private parties in Railway projects is being explored but also financial participation by the State Governments in Railway projects is also being encouraged;
6. For handling the non-core activities like catering etc., Railways have formed a separate Indian Railway Catering and Tourism Corporation.

    This information was given by the Minister of State for Railways , Shri O.Rajagopal in a written reply to a question by Shri Ramsheth Thakur in the Lok Sabha today.