Monday, January 18, 2016

Railways are conservative in dealing with contract management with private players and need a liberal policy to attract significant private investment in rail sector, Railway Board Chairman A K Mittal today said.

He stressed that ease of doing business should be there to increase volumes.

"Railways should address the concern of private players for attracting private investment. If there is a risk then the risk factor has to be addressed," he said at a function here.

"We have to be fair in dealing with the contract management. Railways should not shy away from renegotiating in the interest of railways as well as investors," he said, adding, "Ease of doing business should be there to increase volume of business."

Voicing dissatisfaction over the pace of development of terminals, he said, "Whether it is a freight terminal or coach terminal we have done very little on improving terminals."

Seeking more investment in terminals, Mittal said the number of private terminals is not sufficient. "There is a need for adequate investment in terminals. There are only 27 private terminals while approvals have been given for 47 more.

We should have 400 private terminals by now."

He said Railways focus is on steel, cement and automobile sectors and there should be improvement on loadings of these goods.

Noting the development in railways since Independence, he said, "We have increased freight rate on a regular basis but not passenger fares. That is why passenger fare is lowest and the freight rate is substantially on the higher side. Today, there is hardly any scope of increasing freight rate any further."

On the contrary, Mittal said spending on the road sector is more than twice than on the rail sector. "As a result there is congestion on rail route because rail network has not expanded much."

Admitting that there has been a fall in passenger booking on small distance routes, he said roads are becoming good while trains are running late because of congestion.

"However, we are trying to spend more on infrastructure," he said.

Speaking at the event, Railway Board Member (Traffic) Mohd Jamshed said railways as a transporter is facilitating investment by stakeholders in terminals as well as rolling stock.

"Railways is opening up strategic partnership with private players in the new area of rolling stock. Railways is inviting private investment in wagons ...and so far 195 rakes have been procured entailing an investment of approximately Rs 3500 cr," Jamshed said.

He said a paradigm shift took place recently when Coal India signed an MoU with railways for procurement of 2000 wagons for Rs 500 cr.

Referring to private freight policy, Jamshed said. "It has already led to proposals of Rs 1500 cr and 72 new freight terminals are coming up of which 27 have already commissioned."

Taking note of global economic slowdown, the Member Traffic said, "It has affected the transport business of railways too but we perceive this as a temporary setback and in the long term an actual opportunity so as to re-strategise our plans and policies."

He said the process of continuous dialogue and interaction with the industry is pre-requisite for any joint initiative to be meaningful and "we have set up a mechanism for the same."

He said the focus is on three key sectors - automobile, cement and steel industry.

"Automobile is a sunrise sector for the Railways where there is a huge capacity and untapped demand in the market.

Presently railways is only carrying four per cent of the total automobile transported in the country," he said.

Referring to wagon investment scheme, he said the scheme has a huge potential for private players.

Railways have to be the harbinger of the transport business in the country, he added.


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