Montek wants to turn railways into a corporation

NEW DELHI: Worried over the slow pace of expansion of railway infrastructure, Planning Commission wants to push drastic reforms in the government monolith, including one to transform it into a corporation.

The suggestion for drastic reforms as done by China recently came from Planning Commission deputy chairman Montek Singh Ahluwalia during a meeting for finalization of Himachal Pradesh’s annual plan.

Suggesting converting the railway ministry into a corporation, Ahluwalia feared that the Railways would take at least 30 years to complete pending projects if it went on at the current pace. He made the comment while discussing a proposed rail link in the state.

The plan panel has been pushing for drastic reforms in the railways, including setting up of an independent regulator to fix tariff.

Fund constraints and new rail links based on political considerations has led to pilling up of delayed projects.

The national transporter needs Rs 147,187 crore to complete 347 pending projects relating only to laying of new tracks, gauge conversion and doubling of tracks while it could manage only Rs 5,000 crore annually for implementing all its projects.

Since railways is back with Congress after a gap of more than 16 years, rail minister Pawan Bansal  is treading a cautious path by pushing up the reform agenda without annoying the aam aadmi and the 16 lakh railway employees.

Bansal got Cabinet approval for PPP models in railways with an exception to encourage private investment. Private players have been demanding a clear policy framework to promote private sector investment and foreign direct investment.

Railways’ modernization requires an investment of around Rs 8.4 trillion in the next five years, of which Rs 2.30 trillion are expected to be raised through PPPs.

Considering the massive financial constraint, Bansal took the risk of increasing passenger fares which were not touched since 2005-06.

However, Ahluwalia’s idea of transforming railways into a corporation may face resistance from within the ruling Congress as many would not like to lose control over the transporter which has been used over the years for political advantage, the reason why the ministry was so popular with regional leaders.