Apolitical Railway Development Authority may regulate train fare

Jan 07, 2016, 10:30 IST | Shashank Rao

The authorities feel the need to set up Railway Development Authority, a separate body to regulate fares, which will not be influenced by political parties

While Indian Railways churns out expensive projects, they are concerned about how no regulation on fares can ruin their efforts. A high-level meeting of railway officials was held in New Delhi on January 1 to discuss the scope of Rail Development Authority (RDA), a fare regulation body.

Once the railway authorities finalise the details of RDA, it will be open to public suggestions. Pic/AFP
Once the railway authorities finalise the details of RDA, it will be open to public suggestions. Pic/AFP

The railway authorities have been complaining for years that the political parties avoid hiking rail fares, which have resulted into an expected loss of Rs 30,000 crore in financial year 2015-16 only from running passenger and suburban trains across the country.

Once the railway authorities finalise the details of RDA, it will be open to public suggestions.

The officials agreed that Mumbai needs expansion and multi-crore projects. Plus, the country’s first bullet train between Mumbai-Ahmedabad too is money guzzling.

“As the fares are merely 0.14 paise per km in suburban section, the local trains are heavily crowded. But this new authority will decide the fares based on the economic needs without any external pressure from political parties,” said a senior railway official.

Expensive projects
Since railways have come up with money-guzzling projects like the Rs 98,000 crore Mumbai-Ahmedabad high speed rail, Rs 10,000 crore Churchgate-Andheri elevated corridor and the R15,000 crore CST-Panvel fast corridor on Harbour line, they also wants to make sure their efforts are not wasted.

The authorities met to plan how RDA would set up guidelines for private companies interested in constructing these heavy investment projects and also determine rail tariffs.

“Fares need to be regulated by a separate body rather than political parties. In the last decade, the losses of running passenger trains (including suburban) has gone up from R6,100 crore to R30,000 crore in this financial year,” said another senior railway official.

No balance
Due to cross subsidization of passenger transport, the demands have spiked substantially but the necessary improvements in infrastructure haven’t been made. The freight or goods’ trains demands have come down from 89 per cent in 1950-51 to 36 per cent in 2007-08.

RDA’s role
Sources also said use of rail tracks will also become chargeable and tariff would depend on what route or alignment the trains take. This would also mean that projects like Dedicated Freight Corridor and the High Speed rail corridor one (like Mumbai-Ahmedabad) will have special tariffs.

The RDA will also look at the scope of private operators entering the sector to run their own goods and freight trains. Also, the recommendations on tariff shall be given by them but the Railway Board will take the final call.

In case the government and political heads don’t agree with the hike proposed by the RDA, then Indian Railways would be compensated through allocations in the Gross Budgetary Support or other mechanisms.

This authority will consist of a chairman and four other members who would have knowledge in railways, infrastructure, finance, law and consumer affairs.

Rs 30,000 cr
Expected losses in financial year 2015-16 from running passenger and suburban trains across the country

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