Exchequer loses Rs 1,500 crore due to frequent disruptions

Targets to cross Rs 1 lakh-crore mark in gross traffic receipts.

The Indian Railways has set an ambitious target to cross the Rs 1 lakh-crore mark in gross traffic receipts in the next financial year, on the back of an increase in earnings from traffic operations. This is despite a shortfall in tonnage by 20 million tonnes (mt) to 924 mt.

Vivek Sahai, chairman, Railway Board, Ministry of Railways, explaining the reworking the ministry has undertaken to keep up the revenues said, “Railways faced some troubles due to disruption of movement in traffic because of agitations across the country and due to the ban on iron ore exports. However, we concentrated on increasing our lead and altering our product mix to ensure a steady flow of revenues from freight operations.”

Lead refers to the distance an amount of commodity is carried over.

Indian Railways, as a result, managed to garner an additional Rs 177 crore in gross traffic earnings at Rs 94,742 crore in 2009-10. According to the revised estimates outlined in the Budget, the ministry will now not only meet the revenue targets set for passenger, goods and coaching operations, earnings from sundry operations will also go up by 11 per cent to Rs 3,530 crore from the earlier budget estimate of Rs 3,170 crore for the current financial year. Sundry earnings imply the revenues railways make from development of railway land.

“The challenge was to ensure that our freight earnings did not decline. For 54 days, we could not transport goods from Orissa due to restrictions imposed to regulate mining activities in the state. We eventually made changes in the movement pattern and picked up commodities which would increase our revenue yield per million tonne”, Sahai explained.

Earnings from coal, for instance, shot up beyond the budget target of Rs 24,319 crore, he claimed.

Sahai informed, taking cognizance that global prices of iron ore shot up by $80 a tonne, the ministry increased freight rates on iron ore for export by $40 a tonne. “We rationalised freight rates of different commodities according to the demand and increased rates by three-four paise a kg. This converted into an additional earnings of Rs 200-300 crore.”

As many as 3,500 trains were diverted due to agitation across the country.

To retain earnings from the passenger front, railways diverted as many as 3500 trains across the country in 2010-11. “Due to dense fog and Gujjar agitation our services were affected. We could have taken a call to cancel trains which would have resulted in loss of revenues as well as inconvenience to our customers. We diverted our trains to run on longer routes. Our capacity utilisation at that time went up to 253 per cent.”

The ministry lost around Rs 1,500 crore due to disruptions in train movements in the course of the year and another Rs 2,000 crore due to the ban on export of iron ore. But overall managed to keep revenues from declining.

Additionally, operating ratio of railways has been brought down to 92.1 per cent from the earlier projections of 92.3 per cent. Railway Board officials say the organisation initiated an austerity drive as a result of which the organisation saved Rs 3,700 crore. Besides, expenditures were controlled so that they did not increase beyond Rs 2,000 crore over the initial estimates.