Decision on fare hike, FDI in rail sector soon: Gowda

Railway Budget is likely to be presented in the second week of July

The cash-crunched Railways is going all out to tap into the funding from the private sector and is likely to take a decision on foreign direct investment shortly. In one of the first key moves, Railways Minister Sadananda Gowda met Nirmala Sitharaman Minister of State for Commerce & Industry to finalise a proposal for FDI in the Railways. Some key projects expecting FDI funding could be a part of the Railway budget.

Besides, the pending decision on fare hike is likely to come next week. The Railways had put 6.5% hike in freight rate and 10% hike in passenger fares under the fuel adjustment component on hold awaiting the formation of new government.

"The Railways is currently short of resources and we need to mobilize all possible avenues of funding. We are holding discussions with the Ministry of Industry and Commerce and very soon we will come out with the course of action. The decision on fare hike will come in the next 4-5 days," said Minister of Railways Sadananda Gowda while speaking to media after a meeting of general managers.

With public private partnerships to be one of the key focus areas in the upcoming budget, the Railways wants the policy to get finalized as soon as possible. Key projects expecting FDI funding will be port connectivity which could be a part of the upcoming Railway budget. Also projects like locomotive factories in Marhowra and Madhepura have garnered the interest of various international companies including some Chinese companies. But these companies require more clarity on the policy front before the investments actually come through.

In December 2012, the Ministry of Railways had notified a Policy for Participative Models for rail connectivity and capacity augmentation projects after a government notification of 2012 permitted foreign investors in construction of fixed rail infrastructure projects and maintenance.

The implementation of the policy, however, requires change in the existing FDI policy.

Also, the earlier draft cabinet note on FDI in Railways mentioned that FDI should be permitted in operations for certain cases like high speed train systems and dedicated freight lines.

With the new government's thrust on developing high speed rail network in India and dedicated freight corridor project in full swing a clear policy for private-foreign participation becomes fundamental for the future course of action for the national transporter.

Other key focus areas of government

-Clean and hygienic stations and trains

-Ensuring 100% punctuality of trains

-Change the working culture, shed hierarchy

-Engage more with the DRMs and ground level officers for new solutions

-Ensuring safety of women and elderly