The rail budget is only a fortnight away but Indian Railways' balance sheet looks far from impressive. Lower-than-expected earnings are bleeding the public carrier in at least 10 out of 16 zones.
Except for mining and port-driven zones such as eastern, south-eastern and western railways and, to some extent, northern railway, the bottomline of the other zones is far from rosy, hurt by drip-feed investment and pressure to add new tracks and trains.
Freight earnings, the prime source of income for the railways, fell below forecast between April and November 2011 and the public carrier is unlikely to meet revenue targets this fiscal.
"Iron ore and coal transportation was hit because of various reasons, including political agitations and unexpected fog in mid-November. Consequently, it appears difficult for the railways to meet its freight target of 993 million tonnes (MT) in the current fiscal," a Railway Board member said.
The total freight carried during April-November 2011 was 593.43 MT. The story in the passenger sector is no different. In eight out of 16 zones, passenger revenue fell below expectations. Passenger and freight revenue taps running dry, the railways is faced with a severe cash crunch to complete key rail projects.
"The railways requires about Rs 1,25,000 crore to complete 129 new lines. Similarly, several safety-related projects and upgrading of the signalling system are on hold because of paucity of funds,'' railway minister Dinesh Trivedi said.
The money is nowhere in sight. The ministry has now gone to the finance ministry and the Planning Commission with a begging bowl, for a one-time grant of Rs 28,000 crore. It has argued that it should get the funds as the Railway Safety Fund of Rs 17,000 crore has been spent.
Trivedi has been arguing for a "complete overhaul" of the railways, which would require an investment of Rs 14-lakh crore over the next 10 years to put it back on the growth tracks. Right now, the railways spends 63 per cent of its earnings to pay salaries to its 14 lakh employees. Another 28 per cent is spent on fuel that propels its 16,000-plus fleet of passenger and goods trains. This leaves little for maintenance and proposed projects.
The financial turmoil roiling the carrier is in large parts because of the trickle of investments in public-private partnership (PPP) projects. "The negative response to PPP projects is a major concern. We have investments coming in every sector - roads, airports and shipping. But why not in railways?'' a zonal chief commercial manager asked.
"We want all goods producers to use the railways as their preferred mode of transportation. But there are no takers,'' he said. Railways' own 'Vision 2020' document projects investments of Rs 14-lakh crore by 2020. Out of this, Rs 5-lakh crore is to come from the central government. The carrier needs the money to build world-class stations, freight terminals, food storage chains, modernise trains and infrastructure.
Courtesy: Mail Today