Date:25/02/2006 URL: http://www.thehindubusinessline.com/2006/02/25/stories/2006022503600800.htm

Back `We are going for aggressive marketing in non-rail related areas'

G. Srinivasan

Mr R. Sivadasan, Financial Commissioner, Railway Board

New Delhi , Feb. 24

The Railways plan to market its strengths "aggressively" in non-rail related areas that hold potential income generation for private players so that the type of public-private partnership the Rail Budget 2006-07 lays out could be feasible in areas such as food plazas, terminal developments and other peripheral activities.

Disclosing this to Business Line here in an exclusive interview, the new Finance Commissioner of the Indian Railways, Mr R. Sivadasan, said that just in the aeronautical business, there would be aeronautical income and income from non-aeronautical business with the latter going up considerably, the Indian Railways have also ventured into non-rail related activities to develop their business potentials and give them to private players.

He cited the case of how terminals could be a sound business proposition by encouraging a horde of activities such as banking, ATM, cyber cafes to draw private players.

Freight corridor

He said that even in the area of developing a dedicated freight corridor through public-private partnership, the idea is to ensure a quantum rise in investments in Railways. The technological upgradation that is likely to result in throughput increase would be achieved by development of wagons with better payload to tare weight ratio and modern signalling and telecommunication.

Asked about the record achievement of revenue earning freight of 668 million tonnes in the current fiscal, Mr Sivadasan said this was achieved through increasing the volume and bringing down the rate for freight.

He said, "our freight rates are three times higher than China and there is no other way than adopting rates which should be friendly to the industry and by that only volume would come".

He said this policy would be sustained and stepped up through high axle load operations by upgrading track structure to handle 25 tonne axle load and a mix of terminal improvements and schemes and rate incentives in future too.

Customers

To a query about the initiatives on the pricing front to woo customers, Mr Sivadasan said that there was reduction in highest class from 240 to 220, besides discounts on incremental freight in empty flow direction, non-peak season incremental freight discount scheme, mini rake and two point rake scheme and loyalty discount scheme.

When his attention was drawn to the commercial exploitation of lands vested with the Railways not making much headway, he said that only last year the Rail Land Development Authority has been established and like any other organisations like DDA it would begin its work in right earnest.

Operating ratio

To a question of improving operating ratio in the IR, he said that productivity all round has shown distinct positive trends and this could be leveraged in the future too.

He said that against the Plan outlay of Rs 23,475 crore for the next fiscal, the Railways internal generation is likely to be 40 per cent, which is 38 per cent in the current fiscal.

He said the trends show that the volume growth in freight was 10 to 11 per cent, 16 per cent increase in revenue and only 6 per cent increase in expenditure.

In the last two to three years, rates have not been revised and despite moderate inflation, the Indian Railways were able to secure better results this fiscal mainly by improving productivity. As a former general manager of the Chitaranjan Locomotive Works, he could vouch for the potentials of stepping up productivity of the railway employees.

Mr Sivadasan said the Railways provision for Depreciation Reserve Fund is "good, going by international accounting standards as it is almost 8 per cent of our gross block asset".

He said that with this "growth-oriented and bold" Budget, the Railways could take on competition in the coming years and this Budget is only but a beginning.