Published Editorial

Rail Budget 2014 focuses on completing priority projects

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Abhaya Agarwal

Partner- Infrastructure Practice, EY

The Railway Minister, in his budget speech, has focused on completing of priority projects and implementing projects announced in the previous budget. He has announced formation of two groups, one, for formulation of projects and second, for monitoring and implementation of project. This is a welcome step, given there are 359 pending projects requiring Rs 1,820,000 Crore. However, this measure will fructify only if these groups are formalized at the earliest. 

The budget has also laid emphasis on using PPP mode for implementation of projects such as high speed rail and redevelopment of stations. In 2012-13, the annual outlay for PPP investment was Rs 1050 crore and it has risen to Rs 6050 crore in 2014-15. Even though the planned outlay for PPP investments has risen, Railways has been unsuccessful in the past in meeting the target. The focus for Railway should be to create a conducive environment to attract private sector participation, especially since the Expert Group for Modernization of Indian Railways headed by Sam Pitroda has envisaged PPP investment to the tune of Rs 4,13,000 crore over the next ten years. 

Further, lot of focus has been laid on passenger amenities such as sufficient water supply and toilets, escalators and lifts, battery operated cars and cleanliness at all stations and improvement in online ticketing. These steps are important since they impact the experience of the common man. 

The Indian Railway network carries over one-billion tonnes of freight a year, connecting ports and mines to industrial clusters, but still there are vast tracts of hinterland waiting for rail connectivity. Though freight traffic has grown steadily over the years, Indian Railways carry only 31% of the total freight carried in the country by all modes. Hence, one of the most important projects for Indian Railways is the development of dedicated freight corridors (DFCs). They are vital for expanding the freight handling capacity of the Indian Railway network and improve the operational efficiency of freight network, given the operating ratio of has fallen from 88.8% to 93.5%.