Rly Board Turns Down Regulatory Body

The Railway Board has discarded the proposal of an independent regulatory authority for railways for fixation of fares and freight, proposed in the draft integrated transport policy. The board instead backed the idea of an integrated regulatory body for all modes of the transport sector.

Speaking to Business Standard, Railway Board chairman V K Agarwal said that an independent regulatory body for railways would be without any purpose as the board has the power to fix the fares and freight independently.

Rather, Agarwal said that there should be an integrated regulatory authority for the transport sector to provide a level playing field between primarily railways and road sector.

 

Refuting the argument that an independent regulator for railways is the need of hour to generate revenue for the cash-crunched department, Agarwal said the solution does not lie in raising of fare and freight.

He said the Railway Board also has the power to raise fare and freight. But, traditionally it was rooted through Parliament, keeping in mind the mass reactions like `rail roko', Agarwal added.

While the railways' market share in freight has gone down to 40 per cent from 90 per cent, that in the passenger segment has touched the low of 20 per cent, from 70 per cent. According to Agarwal, increase in fare and freight may lead to further loss in the market share. And, an independent regulatory body for the railways would fail to provide the level playing field between various modes of transports, he added.

Commenting on several railway projects which have been held up due to shortage of fund, Agarwal said privatisation is not the answer. The projects are not financially viable and privatisation won't make the project financing viable. "We have no such policy as privatisation," Agarwal said.

Agarwal argued that instead of mooting the proposal of privatisation, railways need to be compensated for social obligation which has amounted to Rs 3,000 crore.

Today, no new line is financially viable and viable projects are compensating the non-viable ones, Agarwal said.

Also, railways has become a losing proposition, Agarwal said, unless the department is compensated for the social obligation it would run into losses very soon, he added. The proposal of an independent regulatory authority for the railways could not sail through in the last meeting of the task force on infrastructure following opposition from the Railway Board officials.

The recommendations of the draft integrated transport policy were made by Planning Commission member Montek Singh Ahluwalia.

The proposal would come up for discussion again in the presence of railway minister Mamata Banerjee.