In a bonanza for travellers, the railway ministry is planning to introduce 50 new garib raths and 450 AC trains with pantry cars in Railway Budget 2007-08.
The ministry also plans to float special purpose vehicles (SPVs) with the private sector and state-owned companies for manufacturing wagons and operating special freight corridors.
It also expects the gross budgetary support to go up by 10 per cent from Rs 6,800 crore (Rs 68 billion) to Rs 7,500 crore (Rs 75 billion) in Budget 2007-08.
At present, there are over 6,000 AC trains and two garib raths for the poor (one between Amritsar and Saharsa in Bihar and the other between Delhi and Patna).
Last year, Railway Minister Laloo Prasad Yadav introduced the air-conditioned garib raths with 74 (instead of 64) berths in each bogey, with tickets priced 25 per cent lower than AC three-tier fares.
With a surplus of Rs 13,000 crore (Rs 130 billion) till December 31, 2006, and a target of Rs 20,000 crore (Rs 200 billion), the railways have sufficient cash to invest in more air-conditioned bogeys and parry competition from private budget airlines.
Work on the northern freight corridor (Amritsar-Sonnagar) has begun. For the eastern corridor, the railways are considering an SPV with steel and coal mining firms, since the region mainly sees freight movement in steel and related commodities.
Meanwhile, the ministry is already in talks with leading US and Australian wagon manufacturing firms for setting up an SPV.
A top ministry official confirmed that the railway ministry had had preliminary discussions with wagon manufacturers like Australia's United Group Ltd and USA's Miner Enterprises and Trinity Industries Inc for procuring wagons for the freight corridor.
. . . get dividend windfall
In a windfall for the railways, the Cabinet has cleared the recommendation of the Railway Convention Committee to fix the dividend they pay the government at 6 per cent for 2006-07, against 7.38 per cent last year.
This could mean Rs 276 crore (Rs 2.76 billion) of additional funds for the railways if they meet the target of Rs 20,000-crore capital surplus for the current year.