The working group on Railways for the tenth Five Year Plan has assumed a low growth rate of the sector which has put into doubt the investment plans of the Union Railways ministry.
The report, which will form the basis of the plan projections for the Railways for fiscal 2002-03 to 2006-07, has also largely jettisoned the recommendations of the Rakesh Mohan Committee's blue print for the sector.
The recommendations of the group are significant as the group includes senior officials of the Railway ministry besides officials from the Planning Commission, finance ministry and others, and so give a firm indication of the policy-making trends in the next few years.
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According to the report, the share of the Railways in total freight earning traffic is not expected to grow substantially as the bottlenecks that currently make the Railways' option less attractive for short hauls and high value consignments will continue to remain.
In the current fiscal, the freight target for the Railways has been pegged at 500 million tonne, but even that looks difficult. Till October, Railways have loaded 273.10 million tonne against the proportional target of 281.35 million tonne.
With the government expressing its inability to raise additional plan support, the consequent investment and income stream of the department in the next five years is therefore going to be difficult.
The report of the working group has basically underlined the internal assessment of the Railways that its financial position is under strain. For instance, along with a projected cutback of Rs 1,000 crore in the terminal year of the Plan fund, the ministry is also likely to fall short of the targeted dues clearance of Rs 750 crore from state electricity boards.
The assessment of the working group is based on the projected weak demand conditions in the economy next year also as well as the competition offered by the road transport sector.
While for bulk cargo, Railways has managed to retain its position for the transports who need fast movement of goods and assured supply time like for exports the Railways are at a disadvantage. This is in spite of the recent initiatives taken for port-to-port connectivity by the departmental public sector undertakings such as CONCOR.
But significantly the group has practically nothing to say on the Rakesh Mohan recommendations including corporatising the core functions of Railways. It says the corporatisation of the non-core functions are growing apace.
On the possibility of attracting a larger share of freight traffic, it says the projected launch of the terminal management system along with the Rake Management System under a computerised freight operation information system should improve the situation.