Railway Board chief says expecting a freight growth of 7%

A panel of top railway ministry officials led by Railway Board chairman SS Khurana explained the nuances and the math behind the railway budget in a media interaction on Wednesday. Excerpts from the interaction:

Why is the appropriation to development funds down at Rs 951 crore as against projections of Rs 2,000 crore made last year?
This is because we have had to fund our commitment towards the Pay Commission. We have funded the outgo on account of the Pay Commission recommendations internally.

How does the surplus come? It comes post our gross traffic receipts minus working expenses, minus depreciation reserve fund and minus pension. So if all those figures undergo a change, the entire scenario changes. As compared with Rs 951 crore, you see the projections for 2010 -11 increases to around Rs 3,100 crore. So year on year, it depends on how you perform. But you have to appreciate that the Railways has met that liability on its own. It is the only government organisation that is doing it. For the rest, the government is printing notes and doing deficit financing.

So what is the outlook for this year?
With the kind of loading we are planning to do and the fact that the economy is looking up, we will definitely exceed our earnings targets at Rs 62,489 crore. Now, we are trying to focus on our core business. It may have a little capacity constraint because we have rolling stock issues. We are also looking at non-core revenues.

Has the ministry worked out the implications of passenger concessions and freight concessions?
Estimates suggest it would be around Rs 1 crore as far as concessions to cancer patients are concerned.

Other concessions are yet to be worked out. On freight aspect too, it is likely to be to the tune of a few crores.

How does the Railways plan to develop the wagon investment scheme?
Earlier, we had a scheme only for iron ore. We are in need of investment from private parties. And this is one area that we can tap.

How do you see the Budget. Is it populist or business centric?
It is more of an infrastructure-oriented Rail Budget. The railways ministry has a social responsibility too and, therefore, the focus on social initiatives. But, for health and education schemes, Railways is not spending all the money. It’s a partnership between Railways and other related ministries.

Why has the freight rate been left untouched?
We are expecting significant investment in the PPP projects. We have got Rs 1,000 crore investment from such projects so far. We are expecting a freight growth of 7%, and the operating ratio would also improve. So, we did not feel the need to hike freight rates.

Will there be private participation in the laying of tracks?
The 1,000 km plan for the next year announced today will be funded by the Railways. Subsequently, we will rope in private partners in the segment.