States may have to share burden of unviable projects

With the railway freight business running far from satisfactory and with little to look for to bridge the revenue gap, passenger fares are set to rise across the board and the States will have to share the burden of economically unviable projects.

Railway Minister Dinesh Trivedi, addressing a conference of Economic Editors on Wednesday, categorically refused to state either way but left little to doubt that a hike in passenger fares was in the offing and it was only a matter of finalising the pricing system.

Mr. Trivedi dwelt at length on the thinking process of the Railway Board on rationalising the passenger fares, which had not been raised in the past eight years, also taking into consideration the fact that while the minimum fare was Re. 1, the platform ticket cost Rs. 3.

Dynamic pricing

An across-the-board rise is expected for the two crore passengers who travel daily. However, the tickets will be dynamically priced to save the poorest and will be on the basis of routes between two destinations. Mr. Trivedi said there was no reason to charge the passengers travelling from Dibrugarh to Guwahati and Surat to Mumbai similarly.

He said those living in Mumbai and Surat could very well cover the journey in their cars but preferred the railways as it was more comfortable, cheap and fast. “There is no reason to subsidise those travelling between Dibrugarh and Guwahati.”

Rationalisation of fares

Rationalisation of fares is also the need of hour, given that platform tickets are costlier than the minimum passenger fare. He argued that road traffic prices were seven times higher than railway fares and felt that they would be able to afford to bear a hike in railway fares.

“It is also a question of doing justice to the system. There have been demands for hiking the fare, including from the employees federation because their salaries depended on it. Have patience. We raised the freight rates a few days ago without hurting anyone and we'll handle this job too scientifically.”

Pointing out that passenger fares had not been raised for eight years, Mr. Trivedi said the fares should have been 88 per cent higher than the 2004 levels if one went by the rise in costs and inputs. He did not rule out the fuel component linked to the rise in diesel prices. “How long can we subsidise coal, iron ore and fertilizers too.”

Of 149 projects under way, only 14 are viable and the only way forward is for the States to share the burden for the other projects, otherwise those socially desirable. Mr. Trivedi has decided to visit each State and decide on the spot with the Chief Minister what the State could contribute. Apart from sharing the burden, the States will be asked to provide land free of cost.

In a bid to build new revenue models, Mr. Trivedi intends to explore the possibility of setting up a Station Authority of India to develop the stations modelled as multiplexes equipped with food malls and libraries.

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