Minister rules out train fare hike in budget

Indian Railways does not plan to raise passenger fares or freight charges at present and the upcoming Railway Budget 2016 is unlikely to have any proposal to increase train fares, minister of state for railways Manoj Sinha said.

Speaking on the sidelines of a function to flag off the tri-weekly Lucknow-Kathgodam Express, ahead of the 26 February presentation of the Rail Budget in Parliament, Sinha, however, said it was not right to discuss the rail budget in advance.

"The rail budget will be discussed in Parliament. It is not right to discuss it in advance," he told reporters.

Yet, Sinha, a Lok Sabha member from Ghazipur in Uttar Pradesh, said, "Lucknow will have a lot in the budget but it would not be in the fitness of things to disclose it in advance."

Railway minister Suresh Prabhu had already ruled out any reduction in passenger fares although diesel prices have come down. The railways, however, add a surcharge to passenger fares on account of rise in fuel prices.

"Railway recovers only 50 per cent of the passenger cost it bears. There is already a huge element of subsidy provided to passengers in the fares...Railway services will have to be modernised to meet people's expectations and the network needs to be expanded. There is a huge demand-supply gap and finance is major constraint...The point is how to raise resources," he had said.

Meanwhile, Indian Railways on Thursday concluded its first bilateral power procurement agreement between Damodar Valley Corporation (DVC) and North Central Railway.

Under the agreement, Railways will buy 50 MW of power from DVC at Auraiya grid sub-station facilitated by Railways Energy Management Company Limited, a Joint Venture (JV) of Indian Railway and RITES, a public sector body under the ministry of railways.

This is the beginning of energy cost reduction measure being taken up by the railways, the biggest consumer of electricity, consuming about 18 billion units per year with peak requirement of about 4,000 MW. In order to enable the railways to buy power directly from suppliers, Indian Railways has been notified as 'Deemed Licensee' by the ministry of power.

Indian Railway is working on more such contracts at key load centres in the coming days to enable it to generate significant savings in its traction electricity bills.