Panel moots new body for freight

A separate corporate entity should keep track of earnings from the freight corridor proposed by the railways, the committee on infrastructure headed by Prime Minister Manmohan Singh has suggested.

"The idea is to bring about more transparency to accounting, where profitability of freight business can be gauged accurately," an official said.

This, he said, would help Railways evolve a policy on the extent to which freight could subsidise passenger fares. The new entity will function under the railways.

At a recent meeting of the committee chaired by the prime minister, it was decided that a study group would be set up to pave the way for a rail tariff authority.

The Planning Commission in its mid-term appraisal of the Tenth Plan had also suggested setting up of the tariff authority.

"There is a need to re-balance the tariffs of Indian Railways to reduce the rate of cross subsidisation. A rail tariff authority on the lines of telecom regulatory authority needs to be set up with the mandate to fix tariff on a rational basis," the commission had said.

The railways, however, are opposed to the idea of such a committee. They argue that as the railways have a monopoly in carrying passengers by rail, there was no need for regulating tariffs.

On the funding of the freight corridor, the officials said the railways had proposed a $ 5 billion loan from Japan. The first phase of the project would include the Delhi-Howrah and the Delhi-Mumbai routes, the official said.

The railways had recently proposed a 9,260 km dedicated freight corridor at a cost of Rs 60,000 crore. The work on the corridor is expected to be completed over the next 5-7 years.