Railways to create holding company to divest stake in units

Indian Railways is planning to divest stakes in some of its public sector undertakings (PSUs) and, towards this end, consolidate its assets under one holding company, Railway Board chairman A.K. Mittal said on Thursday following presentation of rail budget 2016-17 in parliament.

"Suppose we go for divestment of any of our 14 PSUs, the divested amount will be ploughed back to the holding company and can be redeployed," Mittal told reporters here.

Presenting the budget, Railway Minister Suresh Prabhu said the ministry was studying the feasibility of creating such a holding company.

"We propose to examine the feasibility of bringing most of these companies under an umbrella of a holding company which would provide the necessary strength for leveraging the combined resources as also in providing the much-needed flexibility in utilising the strength of each of the subsidiaries," he said.

Undertakings run by Indian Railways include the Indian Railway Construction Company (IRCON), Indian Railway Finance Corp., Container Corporation of India, RailTel Corp of India and the Indian Railway Catering and Tourism Corp.

Leaving fares unchanged while railway finances are under strain, Pradhu said the Indian Railways would increase its revenue through non-fare sources.

Railway revenue through non-fare sources would be increased to the world average of 10 percent -- from less than five percent that it currently is -- over the next five years.

Some of these sources of income the minister outlined are the station redevelopment programme to monetise land and buildings through commercial exploitation of vacant land, monetising land along tracks, and use its vast physical infrastructure for commercial exploitation through advertisement.