Railway budget 2010 comes up short on strategy

Railway minister Mamata Banerjee’s Budget has failed to emerge as the cornerstone, in policy terms, that will support the mega infrastructure push announced in the Vision 2020 document tabled during the previous session of the Parliament three months back.

Seen in the context of the Vision 2020 document, the Budget gets reduced to a business-as-usual one with no clear-cut policy announcement on issues such as private-public participation (PPP) in railway network expansion, upgrade and maintenance of the production units, world-class stations and adarsh stations, among others.

All that the Budget seeks to do is a typical sarkari solution —- yet another committee to look into pending issues.

Speaking in the Lok Sabha on Wednesday, Banerjee said, “I have decided to set up a special task force to clear proposals for investments within 100 days. Our policy guidelines will be made easy, simple and investment friendly.”

Agreed, but how is didi planning to address piled-up projects worth Rs 143,140 crore over the last so many years? This includes 11,985 km of new lines costing Rs 50,405 crore, gauge conversion of 7,380 km costing Rs 17,309 crore, and doubling of 4,822 km of tracks costing Rs 11,748 crore.

Against this backdrop, what has been announced in the Budget on these fronts may well just pass off as an apology for infrastructure push.

This year’s Budget seeks to add 1,000 km of new lines, 700 km doubling and 800 km gauge conversion. It’s too small a beginning especially because 64% of investment of over Rs 14,00,000 crore in the next ten years has to come from PPP. And for the balance too, the Railways need to plan well in advance, both of which, unfortunately are not adequately addressed in the budget.

Railway ministry officials, however, say the target is just fine in view of the average of 180 km a year. However, the 1,000 km lines will not be taken up in private partnership and the railways has set aside a quantum of Rs 4,411 for the purpose.

Reacting to the Budget, Akhileshwar Sahay, president (infrastructure advisory), Feedback Ventures, the New Delhi-based consultant, said, “The Vision 2020 document had laudable goals and this Budget being the first since it was released, should have clearly come out with an actionable strategy for completing the 25,000 km new line in ten-year period, a focused approach on a game changer strategy to take on the competition from highways, by developing core competency to handle diversified traffic (going beyond the tradition commoditised bulk basket) and a clear path for organisational transformation.”

“The Budget is not clear as to how the PPP projects, which have not taken off the ground in past four years, are going to be expedited. Banerjee has shied away from providing a transformation execution road map and has skirted the issue of how she is going to fund massive infrastructure creation agenda,” Sahay said.

Interestingly, in the last two-three years, railways has just been able to execute projects with a mere Rs 4,428 crore through PPP.
Yet, it looks like All Izz Well on some fronts.

Recognising the importance of the dedicated freight corridor project, Mamata Banerjee has announced a revamp.

“I am concerned about the pace of progress and the Dedicated Freight Corridor Corporation of India Ltd will be revamped within a short span of time to ensure timely implementation,” she said.
In addition, special freight trains for automobiles, vegetable oils, molasses, chemicals and cement will be notified shortly.

To provide last-mile logistic solution, railways will provide door-to-door service to freight consumers.

One rake of road-cum-railer vehicle will be introduced on trial basis. The freight loading target has bee revised to 944 million tonnes.

Wagon procurement, too, has got the requisite fillip. The procurement target for 2010-11 has been pegged at 18,000 units.
The Integral Coach Factory in Chennai would be further modernised and expanded. Also, a wagon repair shop will be set up at Badnera near Amravati.

A major announcement that came on this front is modified wagon investment scheme. However, the budget is silent on what the contours of this.

Railways is also stepping on the gas on the high-speed travel issue.

Going forward, the ministry will be setting up National High Speed Rail Authority for planning, standard setting, implementing and monitoring the projects.

Other announcements pertain to shift gradually to accrual-based accounting system, fast-tracking the already announced projects by ex-minister Lalu Prasad such as coach factory at Rae Bareilly and Madhepura.