PM sets deadline for setting up Rail Tariff Authority

Prime Minister Manmohan Singh has set a deadline of December 31 for an inter-ministerial group to finalise its proposal for setting up a Rail Tariff Authority that will suggest rationalisation of passenger fares which have not seen a hike for the last nine years.

At a meeting to review the functioning of key transportation ministries, Singh said the IMG under Railway Board Chairman should "finalise and submit its recommendations on the Rail Tariff Authority by December 31, 2012," a PMO statement said.

The formation of the Rail Tariff Authority (RTA), proposed in the Rail Budget 2012-13, has to be approved by the Cabinet. The Prime Minister has sought to expedite the formation of the RTA and asked for a Cabinet note to be brought latest by January 15, 2013.

RTA is expected to look into the operational expenditure including the diesel and power cost for the train operation and suggest hike in the passenger fares to absorb the escalated cost. Currently, the railways is facing a loss about Rs 24,000 crore in passenger fare segment.

The cash-strapped railways is in the need of financial bailout as many of its ongoing projects are facing acute shortage of funds. Railway Minister Pawan Kumar Bansal, after taking over the ministry, had hinted at a possible fare hike in near future.

However, he has maintained that the fare will not be hiked for hike sake. "If fare will be increased then it will be for providing better services to passengers." The Prime Minister has also asked the Railways to expedite finalisation of bidding documents for multi-crore locomotive plants at Madhepura and Marhora in Bihar.

The big-ticket projects are to be executed in the PPP model. "The bids for the Madhepura electric locomotive project will be called by December 31, 2012 and the project will be awarded before the Railway Budget. The inter-ministerial group set up under the CCEA approval will consider and approve any necessary changes to documents," the PMO release said.

For the diesel locomotive plant at Marhora, timelines for the project will be announced by December 15, it said. Besides, the PM has directed the Railways to take up the elevated rail corridor and Dedicated Freight Corridor (DFC) projects on a priority basis.

On elevated rail corridor between Churchgate and Virar in Mumbai, the PM has asked the ministry to do the needful for signing the State Support Agreement with Maharashtra government in the next 15 days. The 60 km long elevated rail corridor with 28 stations is meant for operation of AC suburban trains, a first of its kind, in Mumbai.

The ministry will finalize important milestones with timelines by December, 31, 2012 and bids for the elevated corridor project will be invited before the Rail Budget in 2013, it said.

Taking note of the fast pace construction of the DFC, the release said, "It is moving ahead much better than other large projects because of the dedicated project structure. The ministry will submit revised estimates with details on source of funding for DFC project by December 15, 2012."

The 3300 km long DFC comprises Western (Dadri to Jawaharlal Nehru Port Trust) and Eastern (Ludhiana to Dankuni) corridors. A major part of Western corridor will be funded with Japanese assistance and nearly two third of the Eastern corridor will be built with World Bank assistance. The Sonnagar-Dankuni section part of the Eastern corridor will be executed on PPP mode. Indian Railways is also investing a substantial amount in the project.

The ministry will also provide milestones with timelines for Sonnagar-Dankuni Project and adhere to them, it added.