Rs 8.5 lakh cr to be pumped into Railways in 5 years

Laying emphasis on capacity expansion, decongestion of network and passenger safety, Railway Minister Suresh Prabhu on Tuesday said a massive Rs 8.5 lakh crore would be pumped in over the next five years to make it a viable organisation and bring back the road traffic. 

Replying to the Rail Budget in the Rajya Sabha, he allayed apprehensions about workers being retrenched as the public transporter seeks increased private participation and said that funds would be sought from multi-lateral agencies like World Bank, ADB and IFC.

Hitting out at opposition criticism, he said the Railway Budget has not discriminated against any state and listed out the enhanced allocations to states across the country.

"We will have to work on many issues. There has been less investment in the Railways. We have not been able to put in money and as a result Railways has lost to roads in attracting goods traffic. Less investment has also led to clogging of the network and delays in train movements," Prabhu said.

Stating that Railways would require Rs 8.50 lakh crore in the next five years, the Minister said that Rs 2 lakh crore would be utilised for network decongestion and an equal amount would be spent for network expansion.

Besides, Rs 40,000 crore would be utilised for implementing national projects in places like Jammu & Kashmir and another Rs 1,27,000 crore would be spent on addressing safety issues.

Referring to the recent pact with LIC for getting Rs 1.5 lakh crore, Prabhu said his Ministry expected Rs 3 lakh crore from the Finance Ministry as gross budgetary support in next five years, besides borrowings from multilateral agencies like World Bank, ADB and IFC.

With fuel cornering 25 per cent of its expenditure and a massive 50 per cent going to to meet staff expenses, the Minister said the Railways proposed to increase volume of operations to offset the cost borne on salary and other expenditure.

"This is the strategy that we are adopting to plough back money to meet Railways' expansion plans," Prabhu said.

Allaying apprehensions by members, he said "there is no plan to retrench any employee of Railways" which would take care of their welfare and concerns.

On the safety issue, he said that 3,400 unmanned level crossings would be eliminated and 9,000 road over-bridges and road under-bridges would be constructed to prevent accidents as most of them happen on these crossings.

Prabhu also sought to take states on board, declaring that they would be partners in progress of the Railways by executing several projects in their respective areas.

He announced faster project execution through joint ventures with all major states where both the Railways and the states would hold equity.

Capping over a 12-hour debate, he rejected criticism of the freight rate hike proposal and said it was in fact rationalisation of rates which had gone down on some routes.

Citing a CRISIL report, the Minister said the freight rate hike would virtually have no impact on inflation.

Stressing on decentralisation of powers in Railways, Prabhu said the decisions in tendering processes have been delegated to general managers, from where it would percolate down to divisional railway managers and station masters.

Railways have also ensured transparency in appointment of Railway Board Chairman and board members and was initiating all commercial transactions to the e-tendering process. Its recruitments have also been initiated through online process.

Prabhu said he would consider suggestions of extending reservation facilities for former MPs and assured members that the catering facility would spruced up and sugar-free tea would be made available.

All new coaches would be fitted with bio-toilets in the coming years, he said. Earlier, Jairam Ramesh (Cong) had demanded that the facility should be made available in all the 60,000 coaches in operation saying "single biggest blot on railways is lack of sanitation."

Prabhu also announced setting up of high-level new body, Kaya Kalp Council, to be headed by a distinguished person to turn Railways into a vibrant organisation commercially with the participation of private sector.

The Minister said plans were also afoot to PSUs including Coal India and those in the oil and gas sector, to boost railway infrastructure.

To give a fillip to its finances, Prabhu said Railways have joined hands with SBI Cap and set up an advisory board with members like noted bankers KV Kamath and Arundhati Bhattacharya.

As many Opposition members questioned the viability of PPP projects, he referred to the budget speeches of previous Railway Ministers like TMC chief Mamata Banerjee and supported some of her proposals.