If railways has the freedom to "fix up" rates of its passenger segments, then freight tariff can be rationalised, Railway Board Chairman Vinod Kumar Yadav said on Wednesday.
Addressing the inaugural session of the two-day Confederation of Indian Industries' Rail Connect event here, he said the problems facing the railways is not one of demand but of capacity constraint.
"If you talk in the real business sense we are losing money on the passenger segment and that is creating problems with the freight segment. Everybody knows that we are cross subsidising by increasing freight rates.
"If we really have freedom to fix up the rates of passenger segments I am very sure that the freight rates can be rationalised. But these are certain issues which has to be sorted out one by one," Yadav said.
He further said the railways is gearing up for a quantum leap in infrastructure development.
"There is no lack of demand, but capacity is a constraint due to lack of land clearance and delayed forest clearances. The truth is that railways has been unable to keep up with the demand of both passengers and freight segment," the rain board chairman said.
Claiming that the dedicated freight corridor projects are being held up due to land acquisition issues on small patches on the line, Yadav said these are the issues they are trying to sort out.
Emphasising the need for focusing on freight, N Sivasailam, Special Secretary, Logistics, Department of Commerce, Ministry of Commerce and Industry said the logistics' contribution to GDP stands at 13 per cent, comparable to that of developed nations of 7-9 per cent but the cause of concern is the declining trend of the contribution made by railways.
"Therefore, we need to prioritise freight in rail transportation", he said.
Sivasailam stressed that digitization, appropriate utilization of assets, encouraging publicprivate partnerships and proper dispute resolution mechanisms will go a long way in streamlining railways and attracting private investors.
Minister of State for Railways Suresh Angadi said with growing consumerism and a large workforce, railways needed further investment, private participation and focus on freight transportation.
"The Government is focusing on market-friendly mechanisms and ease of doing business," he said.
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