'Pay panel may impact operating ratio'

PRESS CONFERENCE

The railways' continued run of increasing profits due to decline in the operating ratio may come to a halt. The financial burden of the Sixth Pay Commission coupled with investments in freight corridor may pull down the operating ratio to around 81, says Railway Board chairman KC Jena

The railway minister has announced fare cut across all classes. When will this be applicable?

We are in the process of defining 'popular trains'. We have already identified the lean season when fare discounts will be applicable. The months of February, March and August will be considered lean season.

The fare reductions in the sleeper and AC classes will be applicable once the new coaches with enhanced passenger capacity are introduced. Already 225 new coaches have been put in use. In the next seven to eight years, all the old coaches will be replaced by the new ones.

What will be the burden of the Sixth Pay Commission on the financial performance of the railways this year?

The Sixth pay commission will be one of the major reasons for an expected increase in our operating ratio. Our estimate is that we have to spend around Rs 5,000 crore for the Pay Commission scales.

What are the thrust areas of the 2008-09 budget?

To consolidate the position gained so far by equipping the system for higher growth.

Capacity augmentation is now a critical requirement. Investments on Eastern and Western Dedicated Freight Corridors will commence soon. We will have a single special purpose vehicle (SPV) for the corridor but the funding pattern will be different in the two corridors.

Upgrade of select iron ore and bulk cargo routes to run wagons with 25 tonnes axle load is also been undertaken. Induction of 250 diesel locomotives, 220 electric locomotives and 20,000 wagons has been planned for the next year.

What has been the key driver behind the improvement in railways' performance?

Over the last three years, Indian Railways have consistently maintained an incremental freight loading of more than 60 MT, and have now set a target of loading 850 MT in 2008-09.

The target of traffic earnings in 2008-09 has been estimated at Rs 81,901 crore, 12.6 per cent more than the revised estimates of 2007-08.