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Railways lays down road map to enhance freight revenue in FY18

LiveMint logoLiveMint 02-03-2017 Jyotika Sood

New Delhi: Rail minister Suresh Prabhu on Thursday chose the railway museum to launch a 2017-18 business-cum-action plan for Indian Railways—bringing back some of the pomp lost with this year’s merger of the railway and general budgets.

The museum, a treasure trove of railway history, was packed with top railway ministry officials as Prabhu outlined the department’s priorities for the fiscal year over a 45-minute speech. These included plans to introduce international freight services, setting up of 100 private sidings/private freight terminals by 2018, roll-on-roll-off and road-railer services along with long-term tariff agreements with railways’ main freight customers.

“Nobody asked us to do this presentation. But we decided to set goals for ourselves and take accountability for the tasks to be undertaken this year,” Prabhu said.

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Unlike what a full railway budget would have done—the merger ended a 92-year tradition—the 63-page document outlined only a handful of new initiatives and gave no figures or estimates for revenue and expenditure for the next fiscal.

The highlight of the plan was a proposal to promote intermodal regional connectivity between the countries of the Asia-Pacific region. The plan said that the Trans-Asian Railway (TAR) route of Dhaka-Kolkata-Delhi-Amritsar-Lahore-Islamabad-Zahedaan- Tehran-Istanbul route has been identified as an important route.

The document said, “It is planned in 2017-18 to appraise in detail the Container Operations on the potential sectors: India-Bangladesh (Gede-Darshana interchange of railways), India-Pakistan (Attari-Wagah Border interchange), Pakistan-Iran (Zahedan interchange yard with break of gauge) and Iran-Turkey (Razi-Kapikrule with standard guage). To move further in this direction and to appreciate and sort out the issues involved, a meeting of CEOs of Railways of the concerned countries will be held in March 2017 in Delhi. Moreover, a demonstration container train run between Bangladesh and India has been planned in the first quarter of 2017-18, the modalities for which have been agreed by senior railway officials of both countries.”

Another new project is the roll-on-roll-off service where trucks are loaded onto railway flat wagons and transported across the country (at present it is just for Konkan Railways) to provide a multimodal transport mix and introduction of cargo-containers called road-railers that can be brought by road on trucks from a godown and directly coupled with the railway wagons at the railway terminal without having to unload them.

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Under its plan to build a better infrastructure for the logistic and freight, the railways plans to have 100 private sidings/private freight terminals by 2018 with 35 of them to be commissioned next fiscal year.

To increase its share of revenue from freight, Indian Railways suggested expanding its freight basket, long-term tariff contracts with selected key freight customers using pre-determined price escalation principle, weightment policy rationalization, freight tariffs based on assured transit time, premium on timely or before time delivery of goods by freight trains which have been launched during the current fiscal year.

For passenger services, the document listed various initiatives that are already ongoing like cashless paperless ticketing, Aadhaar-based ticketing, introduction of new rakes to make train journeys more comfortable and a new catering policy.

The business plan also outlined the different non-fare revenue source for Indian Railways that would start yielding results from the next fiscal. These include rail display network, out of home advertising policy, train advertising, ATMs, content on demand and rail radio. Through these non-fare revenue sources, Indian Railways plans to generate revenue of over Rs15,000 crore over the next few years.

Abhaya Agarwal, partner at EY India, said overall, the road map looked to be a step in the right direction with a focus on enhancing freight revenue, improving passenger amenities and increasing non-fare revenue. Long-term tariff contracts would increase reliability on traffic volume and thus revenue realization. This will create potential for reduction of freight tariff thereby making Indian Railways more competitive when compared to other modes of transport, he added.

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