26Feb

Rail Budget 2015-16 India Update : Suresh Prabhu’s Speech (PART 10)

Mr. Suresh Prabhu’s Speech Continues…

H. Resource Mobilisation

91.Madam Speaker, IR today is resource-light. This is unsustainable. Let alone capital investment, there is not even enough for depreciation. Conventionally, we have looked for Gross Budgetary Support from the Union Government. But this is business as usual. This is neither viable nor necessary.

92.First, the Union government’s financial resources are themselves over-stretched. Second, internal generation of resources will pick up once the Railway reforms start, GDP growth occurs and the Railways begin to attract traffic that has moved elsewhere, especially to the road transport sector. Third, for remunerative projects, it should be possible to generate resources through market borrowings, routed through partnerships with Railway PSUs and IRFC. Fourth, there are several areas where resources can be generated through PPP. Fifth, moving away from debt, some projects can be equity-driven, through partnerships with State governments. All these lead to a simple proposition. One can leverage the resources one possesses better.

93.The size of the Plan Budget has gone up by 52% from Rs. 65,798 crore in 2014-15 to Rs. 1,00,011 crore in 2015-16. Support from the Central Government constitutes 41.6% of the total Plan Budget and Internal generation 17.8 %. In view of the fact that it would be a challenging task to initiate the mobilization of extra-budgetary resources, it is proposed to set up a Financing Cell in the Railway Board, which would seek the benefit of advice from experts in this field.

94.For financing remunerative projects through market borrowings, it is intended to tap low cost long term funds from insurance and pension funds, multi-lateral and bilateral agencies which can be serviced through incremental revenues. Railways will create new vehicles to crowd in investment from long-term institutional investors and other partners. These may include setting up an infrastructure fund, a holding company and a JV with an existing NBFC of a PSU with IRFC, for raising long term debt from domestic as well as overseas sources, including multilateral and bilateral financial institutions that have expressed keen interest in working closely with Railways in this endeavor. We will monetize our assets rather than sell them.

95.I wish to state that encroachment on Railway land is a serious issue. To counter this, digitized mapping of land records has been initiated and responsibility will be fixed on officials for any encroachments.

96.Madam Speaker, we are drawing up a comprehensive policy to tap the latent advertising potential. The new strategy would harness all avenues including offering stations and trains for corporate branding.

97.We are launching a Coastal Connectivity Program this year where Railways in partnership with the concerned ports will deliver rail connectivity to Nargol, Chharra, Dighi, Rewas and Tuna. This programme is expected to mobilize investments of approximately Rs 2000 crore.

98.We propose to launch projects worth Rs 2500 crore through BOT/ Annuity route. These include Wardha- Nagpur 3rd line, Kazipet-Vijaywada 3rd line, Bhadrak –Nargundi 3rd line and Bhuj- Nalia Gauge Conversion.

99.Scrap disposal policy of the Indian Railways will be reviewed for speedier scrap disposal.

Mr. Suresh Prabhu’s Speech Continues…

26Feb

Rail Budget 2015-16 India Update : Suresh Prabhu’s Speech (PART 9)

Mr. Suresh Prabhu’s Speech Continues…

G.Improvements to Management Processes and Systems.

84.Madam Speaker, for the delivery of the action plan, Indian Railways will require new governance structures, new delivery mechanisms, extensive management reforms and transparency across the board. For quick decision-making I have already delegated the power in respect of stores and works tenders to General Managers. I intend to further delegate, de-centralise and de-regulate. Rules and regulations governing freight business will be simplified and made more customer friendly. For example, we have abolished the system of obtaining Rail Transport Clearance from the Ministry. We also intend simplifying the entire process of construction of private sidings.

85.Delegation and empowerment should be accompanied with accountability and responsibility and also monitoring from the apex to ensure that the organisation’s objectives are being met. Towards this end, we propose to get a systems audit conducted for review of all processes and procedures being followed in Zonal Railways.

86.An exercise in identification of global benchmarks for key operating and maintenance activities is being carried out.

87.We intend to improve upon the existing appraisal mechanism for the selection of projects and introduce simulation tools for project planning and decision-making. Further, it is proposed to introduce the EPC system of contracting all over Indian Railways with a view to timely completion of projects.

88.Madam Speaker, we have limited resources and thus must ensure that all public expenditure results in an optimal outcome. We, therefore, intend to set up a working group to modify the present system of accounting, to ensure tracking of expenditure to desired outcomes. The data on costing would be available online including costs incurred on constructing, augmenting, maintaining and operating railway lines. This would also help in undertaking post commissioning evaluation studies.

89.We also propose to have the train operations audited with a view to increasing productivity and bringing in transparency.

90.We are also proposing to expand paperless working in our material management system. In line with focus on ease of doing business, we will digitally integrate our vendors through Vendor Interface Management System to provide single window interface to vendors.

Mr. Suresh Prabhu’s Speech Continues…

26Feb

Rail Budget 2015-16 India Update : Suresh Prabhu’s Speech (PART 8)

Rail Budget 3

Mr. Suresh Prabhu’s Speech Continues…

F. Partnerships for development

77.We will revamp the existing PPP cell in the Ministry to make it more result oriented. PPP will help in creating more jobs in the economy besides augmenting capital for improving Railways.

78.Railways have launched new Model Concession Agreements recently for many of the participative models, and guidelines for this have been issued. Projects for rail connectivity to many ports and mines are being developed under participative models. Standardisation of contractual framework that ensures a level playing field, simplification of procedures and consistency of policy will be ensured.

79.Technology intensive and complex projects like speed raising and station redevelopment require lot of handholding by a specialized agency in terms of preparatory work, exploring technology options and managing bid processes. Indian Railways have signed in the past MOUs for technical cooperation with number of foreign railways or their entities. We propose to launch “Foreign Rail Technology Cooperation scheme”, in order to achieve the higher quality service for our nation.

80.The suburban rail networks are the lifeline for metro cities of Mumbai, Kolkata and Chennai. To meet growing demand there is an urgent need for integrated transport solutions. We will work with all states towards this end. We propose to take up MUTP III for Mumbai.

81.Expansion of railway network to remote and backward areas serves as an engine for growth and brings overall socio-economic development in the region. We propose to set up joint ventures with States for focused project development, resource mobilization, land acquisition, project implementation and monitoring of critical rail projects. I am happy to share that most of them have conveyed their acceptance to our proposal.

82.Railways have a big shelf of projects, which require to be executed at a fast pace. The expertise of Railways PSUs will be used by leveraging their balance sheets to expedite the completion of identified projects within specified time lines and to undertake a higher volume of activities.

83.It is also proposed to set up JVs with our major public sector companies who are our customers for meeting their requirements of new lines. Such focused execution of works will ensure faster completion and ultimately provide the much needed path for them to transport their produce and at the same time generate revenues for Railways.

Mr. Suresh Prabhu’s Speech Continues…

26Feb

Rail Budget 2015-16 India Update : Suresh Prabhu’s Speech (PART 7)

Mr. Suresh Prabhu’s Speech Continues…

E. Technology upgradation

71.Every dynamic and thriving organization needs to innovate and re-invent its practices. In accordance with the vision of Hon’ble Prime Minister for Innovation, Technology Development and Manufacturing, we intend to set up an innovation council called “Kayakalp” for the purpose of business re-engineering and introducing a spirit of innovation in Railways.

72.We need to invest in fundamental and applied research for seeking solutions to rail-specific issues. We intend to set up a technology portal to invite innovative technological solutions.

73.We have decided to strengthen the RDSO into an organization of excellence for applied research. RDSO would collaborate with institutions of repute. We will set up in 2015-16 four Railway Research Centers in select universities for doing fundamental research. GOI has conferred Bharat Ratna on Pandit Madan Mohan Malaviya. To mark the centenary celebrations of Banaras Hindu University, we propose to set up ‘Malaviya Chair’ for Railway Technology at IIT (BHU), Varanasi. This Chair will help in development of new materials to be used in all assets of Railways.

74.A consortium of Ministry of Railways, Ministry of Human Resource Development, Ministry of Science And Technology and Industries on an Investment Sharing Model is being set up as part of Technology Mission for Indian Railways to take up identified railway projects for research.

75.We will shortly unveil an IT vision for the Railways. Online information on latest berth availability on running trains, an integrated mobile application including station navigation system, etc. will be made available. Customer friendly freight movement initiatives such as introduction of bar coded/RFID tracking of parcels and freight wagons, automated parcel warehouses, customer relationship management system, etc., will be undertaken. There will be an integration of train control and asset management applications.

76.IR proposes to move from preventive to predictive maintenance. It is proposed to explore the possibility of completely mechanized integrated track maintenance, which could bring in more efficiency. We intend to bring in state of the art equipment for even routine examination of tracks.

Mr. Suresh Prabhu’s Speech Continues…

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