The fuel adjustment component (FAC) in the freight tariff is likely to raise the cost of commodities by 4-8 paise per kg, Railway Minister Pawan Kumar Bansal said.
With diesel prices going up, the Railway Ministry has announced implementation of an FAC-linked revision in freight tariff from April 1, 2013. This will increase the tariff rates for various commodities by around 6 per cent, on an average and result in additional revenue of Rs 4,200 crore.
“Diesel price revision is estimated to cost Rs 5,100 crore additionally on goods and passenger traffic together. Now, with FAC in freight tariff, we estimate to get around Rs 4,200 crore, while at the same time, increase in fuel cost on passenger traffic amounting Rs 850 crore will be borne by the Railway itself,” Bansal explained in the post budget press conference. Fuel (diesel and electricity) constitutes nearly 17 per cent of the Railways’ total operation cost.
He also clarified that the FAC is a dynamic one. It means this will go down in case of fuel price coming down. It may be recalled that Bansal’s predecessor Dinesh Trivedi had proposed to segregate fuel component in tariffs as FAC. As then suggested, Bansal has proposed that this component be dynamic in nature and change in either direction with the change in fuel cost, say twice a year.
Talking about the setting up of an independent Rail Tariff Authority, Bansal said that a cabinet note has been prepared. Now it has gone for inter ministerial consultation, after which it will go to Cabinet for a final decision. Bansal’s predecessor had mentioned the need for setting up of an independent tariff regulator while presenting the budget for 2012-13.
When asked about involving the rural job guarantee scheme, the Mahatma Gandhi National Rural Employment Guarantee Programme, for some of the Railway projects, the Rail Minister said Gram Panchayats in their respective area can propose for work related with track under the employment guarantee programme.
He justified the “marginal increase” in reservation fee, supplementary charge for superfast trains, tatkal charges and cancellation charges. He said that every passenger did not travel on reserved ticket and every train is not a superfast one. At the same time, enhanced reservation fee has been withdrawn. Bansal claimed that increase in various passenger charges would add Rs 483 crore to total revenue.
Shishir.Sinha@thehindu.co.in