Saturday, February 16, 2013

Rail budget 2013: Fuel surcharge on train tickets in the offing

With the recent hike in diesel prices putting an additional burden of Rs 3,300 crore on Railways, the PSU behemoth is considering to further increase passenger fares or raise freight charges.

Among various options, Railways is contemplating whether to introduce fuel adjustment component in the fare structure to increase fares in all classes or hike.

The ministry, which is in the process of finalising the Rail Budget 2013-14 to be presented on February 26, is likely to raise catering charges in premier trains like Rajdhani, Duronto and Shatabdi, which will be part of the fare.

Railways is already reeling under deficit of Rs 25,000 crore in the passenger segment.

It has hiked passenger fares by 21 per cent from December 22, aiming to mop up Rs 6,600 crore in a year, but the diesel price hike of Rs 10.8 per litre has put additional burden of Rs 3,300 crore annually.

Railway Minister Pawan Kumar Bansal did not rule out another hike when he was asked about it a few days ago.

"We have to form our view on this (increasing rail fare) within next few days. We are working on it," Bansal said. "Wait for 16/17 days," he had said when pressed if the fare hike was in the offing.

Bansal has met Prime Minister Manmohan Singh and Finance Minister P Chidambaram to discuss how the financial burden on Railways could be neutralised.

As far as freight rate is concerned, Railways had increased it by 20 per cent in March 7 last year with a target of additional earning of Rs 18,000 crore annually.

"Though revising the freight rate is an option but we do not want to outprice ourselves by increasing freight charges further as we have to offer competitive tariff to remain in the market," a Railway source said.

Railways aims to divert goods transportation from roads to rail by offering attractive rates as currently the national transporter has only 36 per cent market share as compared to about 50 per cent in the US and China.

Burdened with increased diesel cost and a large number of pending projects, Railways has sought Rs 38,000 crore as general budgetary support from the Finance Ministry for fiscal 2013-14.

"We have sought Rs 38,000 crore as budgetary support in the 2013-14 Rail Budget," a senior Railway Ministry official said.

Railways had received Rs 24,000 crore from the Finance Ministry as support in the current fiscal.

"Funds are required for laying new lines, development of stations and for ongoing projects," the official said, adding that, "Fare is one source but funds can be garnered from other non-traffic avenues which we are also exploring."

Railways has 43,000 hectares of vacant land which it is trying to use for commercial purpose.

Passenger fares were hiked across the board on December 22 after 10 years as successive Railway Ministers had not touched them for a decade.

"There are 347 rail projects worth Rs 1.47 lakh crore pending and we are planning to complete some of these works in the next fiscal," the official said.

Besides, Railways expect to generate Rs 7,000 crore revenue from internal generation and Rs 18,000 crore from market borrowing next financial year.

"Certain pending projects involving laying of new lines as last-mile connectivity are being identified and we want to complete them," he said.

Railways plans to invest Rs 5 lakh crore in capacity addition during the 12th Five-Year Plan (2012-17).

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