‘CII welcomes the attempt to reconcile commercial and social objectives – Impetus on resource mobilization through PPP is anchored on pragmatism.’

08/07/2014 … Welcoming the maiden rail budget of the new government Mr. Ajay S Shriram, President CII said thatThe Rail Budget has presented a broad vision on what needs to be done in this critical sector in order to upgrade infrastructure and improve operational efficiency.   CII welcomes the ambition to be the largest freight carrier in the world, as presented in the Railway Budget.  The Minister has been realistic and candid in acknowledging the problems faced in implementation of projects and improving revenue realization”.

 Addressing Press and Media, Mr. Sumit Mazumder, President Designate CII and Chairman, CII Special Task Force on Railways stated that “The Minister has presented a practical and execution-oriented Budget, laying emphasis on implementation of on-going projects and focusing on monitoring them for an early closure. If projects are made attractive to private investors, funds through PPP and FDI will be available. Multilateral funding should also be accessed for high speed corridors. CII appreciates the increased attention to improvement in passenger amenities and safety”.

 Mr Chandrajit Banerjee, Director General, CII stated that the Railway Budget has attempted to deftly strike a fine balance between commercial and welfare objectives to present a credible budget while eschewing populism.  A pragmatic budget, the thrust on increased passenger amenities, cleanliness and efficient station management, greater safely measures and seeking the involvement of corporates to take this forward shows that the budget is anchored in reality. The accent on resource mobilization through the public private partnership (PPP) and FDI and through surplus generated through PSUs is indeed commendable. Similarly, the restructuring of rail board is a bold initiative which would help improve efficiency in the system and pave the way for flexible decision-making and restructuring of railways on commercial lines, stated CII. At the same time, there is an intent to avoid resource generation through borrowing. The proposed setting up of Innovations and Incubation center would also help harness the practical ideas generated by railway staff to improve the functional efficacy of railways. Introducing fuel adjustment component for linking tariffs with movement of fuel prices is a balancing act required to address the financial challenges faced by railways.

 It is heartening to note the stress on timely implementation of projects and reducing the time and cost overruns due to tardy project management. In this context, the setting up of the Project Formation & Monitoring Group at the level of Railway Board to help overcome delays in project execution is welcome.  Similarly, to expedite the projects at the ground level, the constitution of Project Monitoring & Coordination Group consisting of officials of State Government, Railways and professionals is timely. The proposal of close monitoring of the execution of Dedicated Freight Corridors is also noteworthy.  

 Another positive, according to CII, is the accent on rail modernization through the PPP mode, the announcement of bullet train on Mumbai-Ahmedabad sector, increasing the speed of trains in select 9 sectors and plans to set up a Diamond Quadrilateral Network of high speed rail connecting major metros and growth centers of the country. Further, plans to facilitating connectivity to new and upcoming ports through PPP, speedy work on coal connectivity lines, setting up of logistic parks, among others which would push rail services closer to global benchmarks.   Expressing concern over the high operating ratio which is expected to be 92.5% in 2014-15, CII feels that this would constrain internal resource mobilization

 

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