Bleeding Suburban Rail Systems to get States’ support

Draft policy on suburban rail puts major onus on States. The catalyst for the ‘hands-off’ policy, according to officials, is the bleeding status of its seven current suburban railway systems

It seems the railway ministry has finally had enough of running suburban systems. In a draft policy issued a couple of days ago to all state governments by the Works Planning directorate of the ministry, the latter has put all responsibility of conjuring up new suburban systems in cities on the respective states. State governments have been asked to give their feedback in the next fortnight.

The catalyst for the ‘hands-off’ policy, according to officials, is the bleeding status of its seven current suburban railway systems. According to the CAG report tabled in June this year, the cumulative losses from the suburban systems of Central, Eastern, South-Central, South-Eastern, Southern, Western and Kolkata Metro for the period 2010-15 stands at a whopping Rs 13,631 crore. During this period, the Railways carried a total of 3,054 crores, of which suburban passengers accounted for 2,225 crores or 72 per cent of all passengers.

According to the draft policy released this week, “feasibility studies for suburban projects, duly considering the technical requirements, site feasibility and operational requirements, shall be carried out by the state government at their own cost.” Another criteria is that, “the complete cost of land acquisition, leasing of railway land and resettlement and rehabilitation shall be met by the states, by providing interest-free subordinate debt to the Special Purpose Vehicle or from its own resources.”

Going further, the draft states that “guarantees for the loans to be taken by the SPV shall be provided by the state government.”

The future sustenance of the suburban system has been given to the state government. The draft statement states that “state government would set up a dedicated urban transport fund at state level and city level through levy of dedicated taxes, levies, betterment tax, impact fee, development charges and higher floor area ratio in the influence zone of proposed railway stations to create a pool of resources for part financing the project’s capital cost, replacement of assets and providing operational subsidies.”