Tilak Raj Seth, CEO of mobility division at Siemens feels the budgeted revenue target, outlined by the Railway Minister in his second Railway Budget presented on Thursday, looks achievable.
Seth says high level of transparency was maintained in the operations last year.
He says the announcement to electrify 2000 kilometres in FY17, provides good business opportunity.
Below is the transcript of Tilak Raj Seth’s interview.
Q: What is your first impression of what we have heard today?
A: I think the impression is embodied and enshrined in the phrase that the ministry used yatri ki garima, rail ki gati aur desh ki pragati. So, I think his Budget talked about all the slices suiting the passenger, the movement of the freight and the passenger trains as well as the infrastructure.
On the infrastructure, he made big announcement, the industry never expected this but he said that the new three freight corridor sections between east-west and east-south and north-south will be implemented and this was the big step. Then he did mention by 2020, he would need to see that the unmanned crossings are eliminated and the quadrilateral comes to the semi-high speeds, which is in the range of more than 110 to about 200. So I think there were good announcements on the infrastructure.
On the freight, he was talking about enhancing the revenue by various measures, he said the freight basket would be enhanced then he also mentioned that the freight terminals will be augmented as well as the freight fare would be rationalised.
On various passenger services, he talked about many things.
Q: We want to get your sense on how achievable the targets looked, the ones that have been set out for FY15, considering FY16 has been a bit of a disappointing year for the railways. They have fallen short of their own expectations whether you are looking at passenger revenue growth or freight revenue growth etc, so how achievable do the FY17 numbers look to you and what will it mean from a corporate standpoint in terms of earnings more business from the railways?
A: You have heard that the revenue enhancement — revenue he talked about Rs 185,000 crore, which is 1.5 percent or more than what they planned and we know the actual is a number lower than this. However, considering the current economic situation, I think Rs 185,000 is not far away from achieving if the various other items like accountability and delegation as the minister talked about are kind of followed.
Last year, he mentioned that he would bring in transparency and delegation, which he managed and if this delegation is matched with the accountability, which he did mention that now the various senior management of railways would be seen on performance targets, it is in fact possible.
Q: Last year, there were various promises that were made as well. How much of that did fructify, could you give us a few details and also this year, which is the biggest positive we are looking at? I am just trying to do a like-to-like comparison, what was the most promised, what did come out so this time around what is the biggest positive for you and what is likely to come out of it for Siemens per se?
A: Last time the Budget did talk about that the Mission Directors would be implemented and a lot of accountability and transparency would be brought in. I think the transparency at the highest level was brought in, the procurement got decentralised, which aided to faster decision-making. This helped the industry as such and this was also visible in some of the statements which minister made in today’s speech itself that the big jobs of locomotives were decided in a record time with full transparency and nearly volume was Rs 40,000 crore.
This is percolating in the entire railway operation. Of course, he did mention that he will look at it. In the last Budget, the various obstacles in the speed of the train operation in the entire network, I think a lot of work has to be done there and this time he did announce that by 2020 he would see to it that the entire quadrilateral is coming on semi-high speed.
Another big item he mentioned today, was that by next 15-20 years, Indian railways would electrify the non-electrified route. With this they said that against this year’s plan of 1,600 kilometre, in the coming year, they would electrify 2,000 kilometres. These are signs, which are showing that infrastructure is getting augmented and this helps the entire industry including Seimens who are engaged in rail infrastructure.
Q: Last time around it was announced at around 1,600 kilometres. This time it is 2,000 kilometres. Last year how much was done out of the 1,600 kilometres, could you give us a sense?
A: I do not have the exact number but I know that the lot of implementation on the dedicated freight corridor has already started and this number would not be far away from 1,600.
Q: Looking at it from a business standpoint, which sector do you think gets the biggest fillip looking at Rail Budget 2016, do you expect of further impetus as far as civil engineering is concerned from the railways, the orders that are coming in from railways, which sector do you think stands to benefit the most?
A: I have not looked at the details of the capital outlay of Rs 120,000 crore, which the minister announced but considering that he did mention that all the civil engineering contracts that were foreseen in the last Budget have been awarded, I think that the coming year will also show similar trend and the expenditure in rolling stocks in their own factories the way it is happening will continue.