26Feb

Rail Budget 2015-16 India Update : Suresh Prabhu’s Speech (PART 11)

Mr. Suresh Prabhu’s Speech Continues…

I. Human Resources

100. I strongly believe that the workforce of Indian Railways is its strength. To prepare them for the future and for enhancing organizational performance, systematic Human Resource Audit would be undertaken. As part of the focused Human Resource strategy, measures would be adopted to raise employee productivity in line with global standards. It is also proposed to pursue creation a separate accounting head for HRD and develop ERP based Human Resource Management System.

101. Our frontline staff is the first point of contact with the public. We intend to start a special training module on soft skills for them so that our customers feel welcomed. Training in yoga will be imparted to our staff, especially from RPF. 102. We are in the process of setting up a full-fledged University during 2015-16. 103. We will take up the work of repair of staff quarters and also of RPF barracks. We will also improve the delivery of health services to our employees. For the recreational pursuit of our staff we have decided to upgrade four Holiday Homes, to begin with.

J. Energy and sustainability

104. Madam Speaker, we have set up an Environment Directorate in Railway Board to give increased focus and thrust on environment management.

105. Indian Railways is the largest consumer of electricity and thus has substantial potential for reducing energy consumption through various energy conservation measures. Thrust will also be given for adoption of energy efficient LED luminaries, appliances, etc. as a part of an energy conservation drive. A detailed energy audit will reveal huge potential for energy saving.

106. Although a bulk consumer, Railways pays extremely high charges for traction power. It is proposed to procure power through the bidding process at economical tariff from generating companies, power exchanges, and bilateral arrangements. This initiative is likely to result in substantial savings of at least Rs. 3,000 crore in next few years.

107. To reduce dependence on fossil fuels, it is intended to expand sourcing of Solar Power as part of the Solar Mission of Railways. Work is in full swing at the solar power plant at Katra station and is slated for completion in March 2015. Further, 1000 MW solar plants will be set up by the developers on Railway/private land and on rooftop of Railway buildings at their own cost with subsidy/viability gap funding support of Ministry of NonRenewable Energy in next five years.

108. We have launched a mission for water conservation. Water recycling plants will be set up at major water consumption centres after conducting water audit. Expansion of water harvesting systems will also continue.

109. All our workshops are in the process of getting accredited for environment management. This will be extended to the loco-sheds, and major coaching and wagon maintenance depots.

110. Madam Speaker, the House will be happy to note that CNG based DEMUs have been introduced on Northern Railway and it is proposed to convert 100 DEMUs to dual fuel – CNG and diesel. Locomotives running on LNG are also currently under development.

111. We are making efforts to bring noise levels of locos at par with international norms. We will demonstrate our sensitivity to the wildlife by factoring in concerns related to their environment.

112. Madam Speaker, we need to invest in Indian Railways also because it is necessary for our ecological sustenance. The annual consumption of fuel by the Railways is just about 7% of the annual fuel consumption by the road sector. The energy consumption is about 75%-90% less for freight traffic when compared to road. The carbon dioxide emission is about 80% less than road. Investment in Indian Railways is an investment in our future. It is an investment in our sustainability. It is an investment for posterity.

Mr. Suresh Prabhu’s Speech Continues…

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…

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