LawMin asked to chart route for rail tariff authority

The proposed authority would frame rates, keeping in mind the Centre's projection of Plan and non-Plan requirement of funds

With the Cabinet giving its in-principle nod to a proposal to set up a Rail Tariff Authority (RTA) last month, the Ministry of Railways has written to the Department of Legal Affairs, asking whether such an authority could be set up through an executive order, without taking the due course of legislation.

The approved Cabinet note on an RTA had a clause saying the law ministry’s approval was required.

“We want to be sure whether setting up a Rail Tariff Authority through an executive order is constitutionally sound because other tariff regulators for telecom and power were set up through proper legislation,” said a senior government official, on condition of anonymity.

Another official said, “We want the  Authority as soon as possible but we want to be sure. What if someone goes to the court tomorrow, challenging the constitutional validity and gets it struck down?”

The RTA would be a five-member body, headed by a chairman. While the other members would be central government employees, the chairman cannot be from the central government unless he has served at the level of a secretary. Railway officers with commercial experience would also be eligible to be members.

Sources said the RTA would frame rates, keeping in mind the Centre’s projection of Plan and non-Plan requirement of funds. This is expected to bring politically-motivated announcements out into the open. “Once you have an RTA, it would ask how a project can be announced without the required funds. It would bring more transparency and put announcements made as political compulsions an explicit fact open to public scrutiny,” said a senior government official.

The RTA would also have to consider investments for expansion or asset replacement, assessing the cost against quality, economic viability of operations, augmentation of efficiency, among others.

The selection committee for the RTA would comprise the Cabinet secretary, the chairman of the Railway Board, the finance secretary and an expert on railways.

Officials said RTA would be an advisory body, and this reduced the status of its recommendations to mere suggestions.

However, a senior official said, “The RTA’s word would be a strong recommendation and difficult to ignore. The very fact that it would increase transparency and bring the process of deciding rates out in the open is a huge step for us.” Some say this would put the RTA on path of political pressures.

An official hinted there was reluctance to put the issue of passenger rates in the purview of RTA, though it would be an advisory body.

The concept of an RTA was mooted by Dinesh Trivedi and endorsed by Pawan Kumar Bansal, both former railway ministers.