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Showing posts with label Revenue Expenses. Show all posts
Showing posts with label Revenue Expenses. Show all posts

Sunday, 16 April 2017

12:11

Railways spending more for every rupee earned

Railways spending more for every rupee earned

NEW DELHI: The operating ratio of the railways has witnessed a deterioration in comparison to previous fiscals indicating more expenditure and less saving for the public transporter, Lok Sabha was told today.
The railways’ operation ratio was 91.3 per cent during 2014-15. It improved to 90.5 per cent in 2015-16. However, for the fiscal 2016-17, operating ratio was 94.9 per cent, a deterioration over the last year.

In the railways, an operating ratio of 80 per cent or lower is considered desirable.

An operating ratio indicates how much the railways spends to earn a rupee. An operating ratio of 94.9 per cent means that the railways is spending 94.9 paisa to earn 100 paisa (one rupee). A lower figure of operating ratio is therefore regarded better and is indicative of better financial health of the system.

The recommendations of 7th Pay Commission with regard to pay and pension were approved by the government for implementation during 2016-17 and accordingly, the operating ratio of railways in revised estimates 2016-17 was estimated at 94.9 per cent, Minister of State for Railways Rajen Gohain said in the House.

Implementation of 7th pay panel has affected the railways as its expenditure for pay and pension has increased considerably.

Gohain said the railways sought assistance from the Finance Ministry to meet the additional liability arising out of 7th Pay panel recommendations.

However, the Finance Ministry advised the railways to explore raising own resources for implementation of the recommendations.

Source:- Economics Times
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Tuesday, 8 September 2015

09:23

Merging of Metro & Suburban Rail Systems would do well for Indian Cities

Merging of Metro & Suburban Rail Systems would do well for Indian Cities

Every metropolitan rail system in India—and mostly across the world—runs at a loss, so the endeavour of these systems is always to reduce these losses. The 13-year-old Delhi Metro has proved to be adept at doing just that.

The 6-line metro system serving India’s national capital territory incurs a loss of Rs 0.47 crore less per km (2011-12) than the country’s three older suburban railway networks, and, as this writer’s analysis has revealed, Indian cities would do well to operationally merge both kinds of commuter services—the new metros and older Indian-Railway-run lines.

India’s four functional metro systems carry fewer passengers than the older suburban railways: The 90-year-old, 433.78-km-long Mumbai suburban railway carries about 7.4 million every day, about three times as many as the 193-km-long Delhi Metro.

But since metros—whether in India or abroad—supplement income from other sources, including advertising and real-estate revenues, they make fewer losses, as the following data make clear:





A fifth of Delhi Metro revenue comes from what is called non-fare-box revenue—advertising, rentals and consultancy services (the Delhi Metro is a consultant to most upcoming India metro lines). The Hong Kong Metro gets only 59% of its revenues from ticket sales. In contrast, 93.5% of the Mumbai suburban system’s revenues come from ticket sales.

Metro systems grow, but they alone will not be enough

Since 2006, four new independent metro projects have started in capital cities of India states. At least seven other metro projects are under construction, as IndiaSpend previously reported. As the table below suggests, this surge was particularly evident after the Delhi Metro began operations in 2002.

This rash of metro-railway construction will help but it is by no means a solution for mass transportation in India’s burgeoning cities.

As the following table reveals, in 12 years, Delhi Metro daily ridership grew 5375%.

Impressive as this growth appears, the Delhi Metro has had to reduce its projected daily ridership, from 3.1 million to 2.18 million to 1.5 million—to be achieved by 2005, as Dinesh Mohan, Prof. Emeritus at the Indian Institute of Technology (IIT) Delhi writes in the Economic and Political Weekly.  This target was to be achieved by 2005 but even by 2013-14 this did not happen.

He observes that the use of different modes of transportation in global high-income cities, as New York, London, Tokyo, Hong Kong and Singapore, suggests that metro rail does not account for even half of the commuters of those cities. Cars predominate, and as slowing traffic in Indian cities indicates, that is increasingly the Indian situation.

India’s suburban railways: Old, creaky, loss-making but popular

Traffic on India’s suburban railways has surged, from 1.2 million in 1970-71 to 4.4 billion in 2012-13. The suburban railways of Mumbai, Kolkata and Chennai occupy no more than 7.1% of the Indian Railways 20819.3-km network, but account for 53.2% of all railway passengers.

As the table below shows, losses are increasing on suburban railways:














The Mumbai suburban railway is the only network that has managed profits in recent years. Yet, it continues to contribute the second-highest share in all India losses and was Rs 0.42 crore per km costlier than the Delhi Metro (in 2011-12).

The Mumbai suburban system lost Rs 1,112 crore in 2013-14, and, according to a 2014 Pricewaterhouse Coopers report (March 2014), is projected to accumulate losses up to 2,764 crore till 2023-24.

A happy marriage could be the way forward

In 2013, the central government drafted a consolidated policy for Metro rail projects, anticipating proposals from about 34 cities with a population of a million or more.

Yet, metro rail projects remain expensive efforts. The cost of building underground rail systems is around Rs 200-250 crore per km and that of elevated systems is around Rs 150 crore per km.

Metro projects involve investments ranging between Rs 3,000 crore to Rs 40,000 crore, as IndiaSpend has reported. Such sums come primarily from international finance agencies, as in the case of the Delhi Metro, whose first three phases were funded 60%, 54% and 49%, respectively, by the Japan International Cooperation Agency.

Although metro rail provides an ideal solution for point to point transport, the more cost-efficient method would be to integrate suburban rail networks with metro rail, as has been envisioned for the Chennai Metro and Chennai MRTS.

By tapping into non-fare-box revenue options, as the metro systems do, suburban rail networks can cut down on their growing losses. This apart, a merging of networks will make commuting easier, connections better and attract more commuters. (Indiaspend.org is a data-driven, public-interest journalism non-profit).
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Wednesday, 27 August 2014

16:33

Opening up of FDI in Railways Infrastructure to attract $10 bn

Opening up of FDI in Railways Infrastructure to attract $10 bn

New Delhi: The opening up of railway infrastructure to foreign direct investment could attract $10 billion in the next five years, according to government estimates.

“According to initial estimates, FDI investment in railway infrastructure could attract up to $10 billion over the next five years. However, the success of the move would be in the framing of the guidelines to attract global players,” a senior Railway Board official said.

Officials said the railways would soon come out with sectoral guidelines to attract investments in different projects.

The proposed Mumbai-Ahmedabad high speed rail corridor and the construction of an exclusive rail corridor for freight movement are likely to speed up with the cabinet allowing 100 per cent FDI in rail infrastructure.

With this policy change, FDI can be brought into high-speed train systems, freight terminals, building of rail links, electrification and signalling systems. A notification will have to be issued for the exact terms and conditions.
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