The Railways Ministry is set to roll out two major initiatives -- setting up of a regulatory authority for fixing fares and creating an infrastructure development fund -- that will have far-reaching effect on the national transporter, officials said.
The latest initiatives of the railways, which has already undertaken a series of changes in its policy and structure, come at a time when Prime Minister Narendra Modi has been laying emphasis on reforms.
While the formation of a railway regulatory authority is likely to be announced through an executive order soon, the World Bank has agreed to anchor the Railway Infrastructure Development Fund with a corpus of USD 5 billion over a period of seven years, a senior Railway Ministry official said.
The fund will be co-anchored by pension and sovereign wealth funds.
The official said these two initiatives are part of major reforms being undertaken by the railways that will transform the national transporter in a big way.
In a recent interview to a TV news channel, Modi has said "reform to transform" is his government's mantra.
The proposed regulatory authority will play a crucial role in deciding rail tariff while the Railway Infrastructure Development Fund will be used in remunerative projects which have scope of good returns in shorter period.
There will be no separate Rail Budget in 2017 ending the age old practice as Railway Minister Suresh Prabhu has written to Finance Minister Arun Jaitley seeking the merger of it with General Budget, a step considered to be a major reform.
Prabhu has already taken steps for decentralisation in the decision-making process empowering General Managers and Divisional Railway Managers. He has also made it mandatory making all procurement through online tendering process.
The official said, "Railways is now exploring non-Budget funding options to implement projects, including high-speed trains, rolling stock, station development, and signalling and infrastructure development which was not before."
Railways has already formulated a medium-term capital investment plan of Rs 8.56 lakh crore for the next five years.
He said there will be no fund constraint for implementing rail projects as adequate measures being being undertaken to garner investment in the national transporter.
Life Insurance Corporation has provided the railways a Rs 1.50 lakh crore loan for 30 years, of which Rs 10,000 crore has been used so far.
Besides, the Japan International Cooperation Agency had agreed to provide loan at 0.1 per cent interest for a 50-year tenure and a 15-year moratorium for the Rs 1 lakh crore Mumbai-Ahmedabad bullet train. The implementation period for the 508-km project is slated till 2023.
This is in addition to the budgetary allocation of Rs 1.21 lakh crore for the railways in the current fiscal.
Railways expects broad gauge lines commissioning to increase to 19 km per day from the present level of 10 km per day and it would further rise to 25 km per day in partnership with state governments.