Railway minister Mamata Banerjee's officials claim she has been able to create magic, like her predecessor Lalu Prasad. (Though, after he left, we were told it was nothing of the sort). Riding on strong growth in revenues from traffic operations, the ministry is looking at revising upwards the traffic receipts it had outlined in the Budget this financial year.
A senior official at the ministry said: "Our revenue earnings have been better than the 7 per cent growth we had estimated. Revenue from freight traffic has registered a strong growth rate. If the trend persists, we are likely to earn more than the revenues estimated earlier this year."
He, however, clarified expenditure had been proportionately higher than that estimated in the Budget, on account of higher wages paid under the sixth Pay Commission. The additional expenses would be met by the increase in earnings. "Targets will definitely be achieved," the official said, adding "if the cost-cutting measures take effect, there is likely to be a surplus as well".
The railways are making efforts to achieve operational efficiency by better utilisation of existing resources, rolling stock and increasing traffic volumes. The ministry is going to conduct an exercise later this month to gauge additional revenues the railways is set to earn from traffic operations.
Akhileswar Sahay, president of the infrastructure advisory division of Feedback Ventures, the project management agency says, however:
"An increase in revenue is good for the railways, but the increase in traffic is riding on the better-than-expected GDP growth. The financial health of the railways will improve only if such an increase is accompanied by a cut in the operating ratio."
The gross traffic receipts of the railways is estimated at Rs 90,626 crore (Rs 906.26 billion) in 2009-10, against the 84,233 crore (Rs 842.33 billion) garnered last financial year. The total expenditure for the year has been pegged at Rs 77,119.7 crore (Rs 771.19 billion), compared to Rs 66,108.7 crore (Rs 661.08 billion) spent in 2008-09.
The railways intend to generate Rs 88,419 crore from traffic operations (freight + passenger) in 2009-10, Rs 58,525 crore (Rs 585.25 billion), or over 65 per cent, of which is to come from freight earnings.
Till October this financial year, the railways earned Rs 48,322 crore (Rs 483.22 billion), an increase of 8.3 per cent over the Rs 44,614 crore (Rs 446.14 billion) earned during the same period last financial year.
Of this, Rs 32,216 crore (Rs 322.16 billion) has come from commodity-wise freight traffic, which has grown by nine per cent over the Rs 29,555 crore (Rs 295.55 billion) earned last year. Passenger revenues, too, have shown an increase -- from Rs 12,575 crore (Rs 125.75 billion) to Rs 13,626.7 crore (Rs 136.26 billion).
If the growth rates persist, industry experts say, the railways may make another Rs 1,000 crore (Rs 10 billion) from traffic operations over the initial estimates.
Ministry sources indicated, with the railways rationalising rates for transporting iron ore this year, the volume of traffic, as well as earnings, have improved. In the first quarter of this year, the volume of iron ore transported through the railways had registered a drop of 14 per cent over the same period the previous year.
Midway into the third quarter, traffic of the commodity has not only stabilised but has also shown growth.
Another measure that has helped the railways is their decision to introduce high-capacity wagons capable of carrying 3,300 tonnes of goods, against the normal capacity of 2,200 tonnes.
The ministry official informed: "We have already inducted 15 rakes of high-capacity wagons. We will add 4-5 such rakes every month, particularly on routes where demand for traffic in cement is high."
The ministry is further concentrating on increasing long-lead traffic to boost earnings from freight. Lead refers to the average haul per tonne of freight. The lead has reported a growth of more than 9 per cent over the 7 per cent growth in tonnage, which has pushed revenues.
Image: Mamata Banerjee
