Funds crunch is a major challenge confronting the Railways and the hike in freight rates, the first major exercise at mobilising internal resources, comes as a respite. But that does not address the core issue fully.
Even if Railway Minister Dinesh Trivedi increases the passenger fares in the budget for 2012-13 to be presented today (Wednesday), much of the money raised would go to meet the expenses of repair and maintenance of the tracks and rolling stock and covering the depreciation costs that have almost been neglected ever since the commencement of the second innings of the UPA-II with Mamata Banerjee at the helm of the Railway Ministry.
The Railway Board is quite aware that much of its efforts would be devoted to solving the problems that have accumulated over last three years. In its perception, more time is needed to chalk out the path of development and the overall growth of the railways.
The prime reason for the abrupt hike in freight rates — hardly a week before the budget presentation —is to balance the current budget and prevent the account books from getting into deep red.
In any case, it would help project a healthy revenue side with the hike expected to yield about Rs. 20,000 crore. But much of this would go to meet the ordinary working expenses which are mounting beyond the expectations of the Railway Board.
The government's budgetary support is expected to be not more than Rs. 5,000 crore, giving little scope for truly augmenting the railways network in terms of capacity, speed or safety, which will be on the priority shelf.
The inability to evolve a public private partnership (PPP) model is afflicting the growth path. Ms. Banerjee failed in her effort and concentrated more on West Bengal than on issues confronting the Railways — Kolkata, and not Rail Bhavan, was her headquarters. The Railway Board was rendered ineffective and she sought the help of “outsiders” who did not deliver at all.
Things have gone wrong to such an extent that new trains announced were not put on the rails by the stipulated closure of the financial year. The Railways found that derailments occurred mostly owing to mechanical, engineering and equipment and traffic failure; increased number of collisions was attributed to the errant drivers and line formation failures and fires broke out on trains due to negligence by the electrical staff. All these have taken a heavy toll on lives during April-December last. .
Sources in the Railway Board feel that it would take them at least a year to put everything back in place-— finances and the system and safety — before venturing to put the development path on the rails.
With modernisation to come a year later, it would indeed be an achievement if the Railways could tie the loose ends and ensure the safe running of trains. The Railways have identified the problems as shortcomings in signal and telecom, engineering, construction, engine failure, carriage and wagon defects, and a steep rise in traffic — all of which have led to accidents and affected punctuality.
The authorities are now planning a realistic budget in terms of not only revenue earnings but also new trains and projects in tune with their capacity to deliver and avoid the embarrassment suffered during the current financial year.
The financial position has been so bad that the planned expenditure of Rs. 57,630 crore has been slashed to Rs. 48,551 for the current financial year and only Rs. 27,964 crore has been spent (58 per cent) out of that by November-end.
The cut has affected safety-related works pertaining to track renewals, bridge works, signalling and telecommunication works, level-crossings, road over and under bridges.