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The Indian Railways has called a two-day meeting of all zonal railway managers in New Delhi this month to review ongoing projects and discuss measures to improve the financial position in wake of a stiff rise in running cost and fears of the PSU missing earning targets.

The meeting which is likely to be chaired by Railway Minister Mamata Banerjee on January 21 and 22 assumes significance as it would also deliberate on issues related to the upcoming Rail Budget slated to be presented in February end, sources said.

The Budget is expected to keep passenger fares untouched and include proposals for dozens of new trains in view of demands from the states as well from MPs, they said.

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A marginal tinkering of freight rates is also on the cards, the sources said. The Zonal railway managers are expected to be handed out a "tough task" to tame the rising expenditure and make an all out effort to meet loading and revenue targets for the remaining period of the current fiscal.

They would also be given the mandate to explore new possible avenues for revenue generation, sources added. The operating ratio, which at present is hovering at 95.3 per cent, is a pointer to the Railways failing financial health.

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The meeting would also review the working of the PPP model which reportedly could not achieve the desired results of attracting private investment in project execution, the sources said.

The issue of completion of ongoing projects including those in poll-bound West Bengal is likely to prominently figure at the meeting, they said.

The Railways had projected to lay 1000 km of tracks this fiscal, but the target could also be missed by about 400 km, they said.

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The Railways' projected earnings for 2010-11 financial year is Rs 94,765 crore (Rs 947.65 billion), of which it had earned Rs 67,880.82 crore (Rs 678.80 billion) till December 2010.

Railway Board chairman Vivek Sahai, in an interview to PTI earlier last week, had, however, expressed hope that the targets would be meet in the remaining months of this fiscal.

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The Finance Ministry had earlier shot down a Railway proposal to waive the annual payment of dividend of Rs 6,000 crore (Rs 60 billion) for the next five years.

The burden of the Sixth Pay report and a decline in freight loading due to illegal mining activities in Orissa and Karnataka coupled with traffic disruption due to varied factors are being blamed for Railways' present financial position.