Financial crunch

Indian Railways needs Rs 1,47k crore to finish projects: Pawan Bansal

By Mahendra Kumar Singh, TNN | Dec 1, 2012, 01.25 AM IST

Railways has failed to manage funds for completing its long list of pending projects, admitted rail minister Pawan Bansal.

NEW DELHI: Railways has failed to manage funds for completing its long list of pending projects, admitted rail minister Pawan Bansal on Friday.

Faced with acute financial stress, the minister announced that projects which are 50% complete will be taken up on a priority basis and also urged state governments to share the cost.

Bansal was candid in admitting that railways had been making new announcements in response to demands of members, and was staring at a "humongous" financial commitment.

The minister disclosed that the state-run transporter needs Rs 147,187 crore for completing 347 pending projects relating only to laying of new tracks, gauge conversion and doubling of tracks.

Expressing helplessness to fund these projects, Bansal informed the Rajya Sabha that in the past railways could manage only Rs 5,000 crore annually for implementing all its projects.

"Railways is one department where we have been making various announcements for new projects in response to vociferous demands raised by MPs. That has landed us in a situation where there is a humongous throw-forward of projects, both in physical terms and financial terms," he said. Bansal argued that the due to large number of projects the financial spread has been thin which is resulting in difficulty to finish work in time.

The minister defended rail officials arguing that the allegations of time and cost overruns in finishing projects were technically incorrect as work was being carried out in accordance with the money sanctioned. Failing to generate resources, he urged state governments to share land cost and 50% of the sum spent on construction to help the transporter to expedite its pending projects.

"The state governments are requested, from time to time, for sharing the cost of the projects, which they consider essential, but which we consider to be non-remunerative," Bansal said, adding that he has written several letters to CMs.

He outlined that steps have been taken to generate additional budgetary resources through state participation, public-private partnership, defence funding, declaring some ventures as national projects and implementation of bankable projects via Rail Vikas Nigam Limited (RVNL).