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The Railway Minister, presumably wiser from the current fiscal’s experience, chose to play safe on the freight front.
His predecessor had projected 5.6 per cent growth in freight traffic to 1,025 million tonnes (mt) for 2012-13; in reality, the growth in the current fiscal, it is estimated , will be lower at around four per cent at 1,007 mt.
The target for 2013-14, therefore, has been set at 1,047 mt envisaging the same four per cent growth.
But then the Railway Minister’s predicament is understandable.
With different wings of the government projecting different GDP figures for the next year, he could not afford to be too adventurous while estimating freight traffic for 2013-14, more so when the current fiscal’s GDP growth is being projected at five per cent.
Theoretically, the infrastructure sector such as the railways should grow at 1.5 times the GDP growth.
But that has not happened this year most probably because the bulk of the GDP growth, whatever it is, has been contributed by the service sector.
Unless the manufacturing and mining sector grows substantially, there is little chance of the Railways achieving any impressive growth in originating freight throughput.
Coal continues to be the mainstay of the Railways’ freight traffic even as coal companies project lower than the targeted production.
Which means, the Railways has to depend more on transportation of imported coal.
But then importing coal is one thing and evacuation of the import out of the port is another.
No wonder, the Railway Budget for 2013-14 proposes an allocation of about Rs 9,000 crore — Rs 3800 crore for port connectivity, Rs 4,000 crore coal mine connectivity and Rs 800 crore for iron ore connectivity projects.
Interestingly, this money is proposed to be spent on seven public-private partnership (PPP) models of rail connectivity and capacity augmentation announced in December last year. But the models are yet to take off.
Except in one model, in all the other cases, the private sector partners will enjoy freight concessions.
Inquiries reveal that at preliminary level discussion, the prospective private sector partners have drawn attention to several grey areas.
The Budget, therefore, indicates that only around 10 per cent of the Plan investment of Rs 63,363 crore in 2013-14 is to come through the PPP route.
The Budget proposes FAC (fuel adjustment component) –linked revision in freight from April.
The Railway Minister indicated that deregulation of diesel prices might make it imperative to announce such hikes at least twice a year in the range of five to six per cent each.
While the decision to construct 49 loops to facilitate running of long-haul freight trains, each of 1.5 km in length, is welcome, no major benefits in this regard can be achieved until and unless these trains are run on dedicated freight corridors (DFCs).
This is because right now both passenger and freight trains run on the same lines, with passenger trains always receiving priority.
Meanwhile, the Railway Minister announces formation of Debt Service Fund for servicing the loans taken from JICA and World Bank for DFCs even as the award of contracts for civil construction work on certain stretches of the DFCs is awaited.
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