Industry Chambers hails Railway Budget

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New Delhi, Feb 26: The Railway Budget presented by Lalu Prasad will create a win-win situation for all - the railways, wagon manufacturers, heavy industries and the common man, said Industry chambers today.

With the past experience of the Railways clearly demonstrating that pragmatic policies and aggressive planning can give substantial benefits to the Railways, its consumers and the national economy, the industry expects a sustained proactive and still more ambitious approach from the Railways towards growth. In the Budget-2008 , the Railway Minister has focused on building capacity for the future by making the required investments in infrastructure, said industry chamber CII.

According to CII President Sunil Mittal the projects for port connectivity, freight corridors, container terminals and improved passenger amenities that were announced in the Budget will go a long way in making India's railway network more modern and efficient.

''With both passenger and freight earnings growing at double digit rates, the Railways were able to earn a cash surplus of Rs 25,000 crores in 2007-08, even as its operating ratio of 76 per cent and return on capital of 21 per cent indicate improving efficiency,'' Mr Mittal said.

CII welcomed the partnership with the private sector, opening up yet another avenue for industry to participate in the spectacular growth of Indian Railways.

Ficci noted the Railway Minister's promise of Vision 2025 statement outlining an investment of a massive Rs 2,50,000 crore in improving the country's railway network. ''This was a radical step to the future. Ficci believes that unless such order of investments are made in augmenting railway capacity, the huge traffic that the growth of the Indian economy will generate cannot be moved,'' said the Ficci statement.

In this context, the chamber has welcomed the Railway Minister's proposals for mobilising Rs one lakh crore out of this investment plan through the PPP mode.

The chamber expressed confidence that the Railways' initiative would generate huge opportunities for India's private sector to participate in the entire experiment.

Ficci said with the Railway Minister introducing several new procedures which will hopefully facilitate private sector participation in the railways, particularly in the design and development of newer models and types of wagons which earlier used to be designed by RDSO.

Industry chamber Assocham President Venugopal N Dhoot said that Mr Prasad's commitment to generate Rs one lakh crore additional investments in next five years through PPP for Railways is especially praiseworthy.

Industry cahmber Ficci President Rajeev Chandrasekhar, welcomed the Railway Minister's announcement of cuts in passenger fares and freight rates, particularly on diesel and petrol by five per cent.

''This is a good and strong anti-inflationary measure,'' he pointed out.

The reduction in the freight rate for petrol and diesel by five per cent and on fly ash by 14 per cent was also welcomed by CII.

This reduction will help offset to some extent the impact of the hike in fuel price.

Mr Dhoot also welcomed Mr Prasad's proposals for five per cent reduction in freight rates for petrol and diesel and 14 per cent reduction in freight rate of fly-ash. ''These measures would give Railways an edge for attracting more and more traffic towards it.'' the statement said. ''A slew of proposals in the Railway Budget seeks to strengthen and expand the traffic handling capacity of the railways which will be able to take care of the requirements of India's growing economy,'' observed the Ficci.

It also appreciated the Railway Minister's proposals for doubling and trebling important railway connections as also his emphasis on raising the axle load of wagons by way of introducing 30 ton-axle load wagons.

The Minister has also mooted introduction of double and triple stacking containers and special type of wagons for specialised cargo like iron ore.

Ficci said these initiatives would bring down wagon turnaround time and thereby increase efficiency and capacity.

Ficci, however, has observed that the railway authorities have often re-classified commodities for freight calculations which resulted in hefty hike in freight rates on specific commodities.

''In fact, the exercise has focused on a handful of commodities and freight rates on these items have gone up subsequently, adding to the transactional costs for the whole economy,'' Ficci said.

Industry chamber Assocham has complimented the Railway Minister for presenting the most pragmatic, progressive and futuristic' budget which will make Indian Railways, one of the best world class institutions.

The Assocham Chief also suggested that some freight relaxations should have been granted for steel and cement industries too.

With the introduction of over 53 new trains, the Railways would pose tough competition for road and air traffic. With this move, the air, fuel and noise pollution on roads would subside a great deal.

Mr Dhoot also complimented the Railway Minister for reduction in fare such as AC First by seven per cent, AC II four per cent and grant travel concessions to women and senior citizens, describing the move that it would help Railways to attract more and more traffic towards it and create healthy competition.

The new initiatives such as target for loading fixed at 850 million tonne for 2008-09 and introduce a large number of trains are also welcome moves, said the chamber.

Commercial use of railways land by Rail Development Authority to give a boost to railways revenue is another step that will prove an important landmark in the history of Indian Railways.

Industry body PHD Chamber, while complimenting the Railway Minister for continuing with the financial turnaround of the Railways and improvement in many parameters, was more scathing in its attack of the Budget as it claimed that the Budget ''has failed to take strategic measures to capture a substantially larger share of the growing goods traffic.'' ''With a moderate slowdown in economic growth and inflation expected to rise further, especially in essential items and the recent petro price hike, it would have been prudent if freight tariff had been reduced across the board,'' said the chamber.

The practice of high freight tariff cross-subsidising the passenger segment is continuing. More freight would only come to the Railways if they become price competitive, provide economical rates, adequately address capacity constraints on the high density corridors, improve terminal and logistic management, upgrade rolling stock and very importantly move the goods with speed and safety.

With the economy growing at eight per cent plus rate, the transport sector has to grow by a matching or higher rate. Growth of Railway traffic faces a major constraint due to saturation of track capacity.

''There is need to ensure that the dedicated freight corridors are completed on time but proper milestones for achieving the targets on time are missing in the Budget. Railways also need to do much more in terms of immediate measures for enhancing track capacity for carrying more freight,'' the chamber said.

Railway Budget 2008 has announced some measures under public-private partnership, but more is required to move towards corporatisation of the Railways.

Decentralisation of power and quick decision making is important for undertaking new investment projects in Railways. It is important that empowered monitoring mechanisms are put in place so that all projects are implemented in a time bound manner, the chamber said.

Mr Prasad has proposed that all coaches will be made of steel from FY09. The global stainless steel major Outokumpu has welcomed this announcement. ''The announcement of production of new coaches of statinless steel is welcome by the stainless steel industry and this move was long over due as use of stainless steel is convenient and comfortable,'' Outokumpu said in a statement.

This will reduce the regular maintenance of coaches and will increase the passenger safety, said company country head Y P S Suri.

''The toilets in all passenger trains should also be of stainless steel, as these will be more hygienic and east to maintain,'' he added.

The introduction of statinless steel coaches will also help in increasing the speed of the trains due to less weight.

Mr Prasad said the railways will spend Rs 75,000 crores to build dedicated freight lines for iron ore and coal, and another Rs 2,50,000 crores by 2013 to improve its use of technology, including global positioning systems and signaling.

KPMG Infrastructure Division Executive Director Arvind Mahajan said, ''there is a long overdue in the freight corridor, the freight market has not been focussed earlier. The movement of coal and bulk cargo has to be augmented, the rail capacity to handle bulk cargo especially from the North East needs to be developed.'' He said precedence is given to passenger traffic to freight due to which the freight traffic gets delayed. Predictability is required in this regard. The dedicated freight corridor from Kolkata to Northern parts of the country needs to be developed to make people prefer rail over road.

Simplex Infrastructures Ltd Director Amitabh Das Mundhra said, ''The Railway Budget 2008 is a forward-looking one. The Minister has been instrumental in taking Railways to new heights and has given a new impetus to infrastructure sector.'' This year's Railway Budget has opened up a host of new openings by laying importance on infrastructure development and increased productivity, benefitting all related companies, Mr Mundhra added.

The budget also aims at introducing intenet connectivity inside the train and also augment the system for online information on train movements.

IBM VP Vidur Kohli said, ''It is an excellant opportunity for all of us. The more we are able to push IT to the common man- for booking tickets, reservation in hotels, chat with relatives while travelling etc, the convienient it becomes.'' Its will open many new avenues. This will also push Indian railways way ahead of the country's airlines, he added.


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