RailEnquiry

DELHI: The cash-strapped Indian Railways is going all out to maximise revenue from non-core activities to keep the utility afloat. Railways minister Pawan Kumar Bansal is striving to raise over Rs 6,000 crore in 2013-14 from activities such as commercial exploitation of its land reserves, letting out advertising space and more aggressive scrap sales.The strategy is critical for the railways, as rising diesel prices have partially offset the gains from the first passenger fare hike in a decade. Losses in the railways' passenger operations have been rising at 18% annually, and are expected to reach Rs 25,000 crore in 2012-13. Rail projects worth Rs 1.5 lakh crore are stuck due to paucity of funds.The across-the-board increase in passenger fares announced by Bansal earlier this month was expected to yield Rs 6,600 crore an year, but the rise in diesel prices will dent the railways' finances by Rs 2,700 crore on its annual fuel consumption of 2.5 billion litres.Last week, Bansal said rail development projects worth Rs 4 lakh crore are stuck due to a funding gap of Rs 1.5 lakh crore. Consequently, the railways have been forced to re-consider a proposal to use its vacant land for commercial purposes, despite previous concerns over the monetisation of land.The Railway Land Development Authority has earmarked 136 sites in 17 states for commercial exploitation from its 43,000 hectare of vacant land, after earlier attempts at leasing land had led to litigation. "Land revenue is a big area provided we can play it well and make it more investor friendly," said former Railway Board chairman JP Batra.

According to officials, the RLDA now has permission to rent out land for malls and other commercial purposes. Renting space within stations to private retailers is also being explored. The railways is also banking on earning of at least Rs 4,000 crore from scrap sales for generating additional funds. It earned Rs 3,903.84 crore from scrap sales until November 2012 and another Rs 3,748.68 crore in 2011. Railway ministry officials said the ministry will also work aggressively on increasing revenue from advertisements, which currently nets Rs 600-700 crore annually.

"This will include using spaces on the platform, on the wagons as well as other parts of the railway premises and boundary walls," said a senior railway ministry official on the condition of anonymity. But parts of that plan have run into some rough weather. "Any billboards or advertisements facing the roads despite being part of the railway premises are taxed by the municipal corporation, which means companies end up paying the railways as well as the corporation. So, the companies prefer to advertise outside of our premises instead where they have to pay only the municipal corporation," the official said.

Significantly, Railway Budget for 2012-13 stressed on the challenge to meet targets and improve efficiency through additional revenue sources. To drive these initiatives, the government had proposed to create two posts in the railways' apex decision making body—the Railway Board—of members in charge of public-private partnerships/marketing, and safety and research.