Railway Board Chairman AK Mittal spoke to the media after the Budget Speech of Rail Minister Suresh Prabhu. Edited excerpts from the press conference:
What will be the impact of the Seventh Pay Commission recommendations on Railways’ finances this year and how do you plan to offset it?
The overall impact of the Seventh Pay Commission is Rs. 28,500 crore. Our calculation shows the impact is a little more than that. Mainly, wages, pension and allowances are impacted by the Pay Commission. The total impact is around Rs. 20,000 crore in this Budget with Rs. 12,500 crore on wages front and Rs. 8,500 crore on pension.
This year, we plan to control the working expenses. The savings from diesel and electrical energy account would be Rs. 5,000 crore. We plan to increase freight by 50 million tonne. With the passenger initiatives, the passenger earnings will go up. The non-fare box revenue will be doubled. So, increased revenue combined with reduction in working expenses will finance the Seventh Pay Commission burden.
What is the funding model of the special purpose vehicle proposed to be formed in the Budget?
Even though while preparing the Budget, it was written that a special purpose vehicle will be formed, I am happy to inform that this SPV has been formed and registered. National High Speed Rail Corporation is the name of the company. It is the beginning of the company and we are still in the process of putting the Directors in position – the process will be completed in 3 months. Simultaneously, supplementary studies are going on. Initially, we are providing Rs. 200 as equity to the SPV. The total authorised capital is Rs. 20,000 crore for this company. The funding model is 81 per cent of the funds will come from Japan and the balance has to be a joint company between the government of India and the (governments of) two states.
There was an announcement related to four trains to be launched for reserved and unreserved passengers. What is the deadline?
These trains will be launched in a phased manner. In the next 2-3 months, some services will start.
Can you please explain the proposed travel insurance scheme for passengers?
Today even though we don’t have an insurance scheme at present, anybody who gets injured in an accident is eligible for some ex-gratia payment and some regular compensation. But there are people who need additional security. So, an option will be given to them to opt for insurance. It could be a simple insurance for injury or theft. These modalities are being worked out and these options will be made available. If the passenger wants this, he will have to pay for it in the same manner as in air plane.
What is the objective of rail auto hub, who will get benefited and why did you choose Chennai as a base?
Delhi is the biggest market for automobile. The other big centre of automobile is Chennai. If I run, the auto freight carriers between Delhi and Chennai it gives me traffic both ways. Delhi-Chennai has been identified as corridor in the beginning for auto transportation.
