Fare enough, prabhu!

1. FARE ENOUGH, PRABHU!
A No-Frills Budget Suresh Prabhu makes a sound beginning by
shunning populism and improving passenger amenities. He tries to put
railway finances back on track, but markets feel the budget should've
been bolder

3. Contd..
Railway Minister Suresh Prabhu kept fares unchanged and eschewed populist
gestures such as new trains and stations in his maiden Railway Budget,
preferring instead to bring a technocrat's focus to try and improve amenities
for customers, set the organisation's trajectory for the next five years and
put its derailed finances back on tracks.
Prabhu, whose appointment as railway minister last November had raised
hopes of fresh thinking in a ministry long used by politicians to dispense
favours to their constituencies, also announced hefty spending increases for
building more capacity and track electrification, and unveiled plans to
introduce faster trains on existing tracks and sweat railways' assets better by
roping in the private sector. The cash-strapped railways will create new
special purpose vehicles to secure investments, he said, as he sketched out
plans to tap lowcost money from long-term investors such as insurance and
pension funds, and multilateral agencies.

4. Contd..
Prabhu, who has secured support worth ` . 40,000 crore from the Union
Budget which signals the government's intent to spend more to revive
investments, plans to tap a wide range of non-railway sources to augment
investments, including setting up JVs with states, PSUs with large investible
resources and multilateral and bilateral agencies.
Other measures include monetising rail assets, particularly railway stations
that can be expanded and refashioned as business hubs, and leveraging
earnings to raise capital from the market. The budget drew plaudits from
experts, many of whom saw it as a credible start to try and reform a sinking
organisation, but it received a thumbs down from the markets where the
feeling was it wasn't bold enough because it steered clear of privatisation
and did not have bold moves for organisational change vital to realize some
of Prabhu's plans.

5. Contd..
Share prices of companies that cater to the railway sector fell by up to 7%,
outpacing a decline in the broader market. Political rivals of BJP slammed the
budget (see opinion pieces by Nitish Kumar and Dinesh Trivedi on Edit Page
and page 12, respectively), while its partner Shiv Sena wasn't enthused
either, saying the budget had little for Mumbai or Maharashtra.
“After two decades of following a suicidal path of playing to the galleries and
constituencies of incumbent railway ministers, after self-inflicted injuries of
decades of neglect of customers and railways assets, this budget comes as
fresh morning air,“ said Akhileshwar Sahay, mentor at infrastructure
consulting firm Feedback Infra and a former Indian Railways official. “The key
challenge before Prabhu is now to walk the talk and ensure that his bold
moves do not die in an embryonic stage. Such is the cultural stasis and past
track record of the Railways.“

6. Contd..
The minister, as predicted by ET on Wednesday, did not raise passenger
fares, to the disappointment of some reform pundits. Freight charges were,
however, increased by up to 10%, portending higher costs for companies in
sectors such as steel, coal and fertilisers.
Prabhu said prices had already been increased last June and there had been
no major concomitant improvement in passenger amenities. “I don't have
the moral authority to increase fares without improving the facilities,“ he
told ET in an interview, adding that it would be difficult to explain fare
increases when diesel prices had fallen.
In the next five years, the railway minister has promised a major
improvements in customer experience in a host of areas such as cleanliness,
comfort, service quality and train speeds.

7. Contd..
From a 24-hour helpline to mobile charging facilities on all trains to a choice of cuisine to
WiFi in stations, Prabhu said railway consumers would get access to all these services.
He also announced plans to launch services called `Train Sets' in the next two years on
some routes, saying these modern trains similar to Japan's Bullet trains in design would
provide vastly better customer experience and a 20% saving in journey time as these
imported trains travelled at higher speeds on existing tracks. Prabhu said the speeds in
nine railway corridors would be increased to 160-200 km per hour from 110-130 kmph
now. hour from 110-130 kmph now.
Prabhu is targeting an operating ratio -a key gauge of operational efficiency -of 88.5% for
the next financial year to end-March 2015, the best in nine years and compared with 91.8%
expected this year. A lower operating ratio means that the railways will save more on every
rupee it earns, allowing it to invest more to grow its operations and provide better
announced an investment plan of . 8.5 lakh crore for the next five years as he pen` ciled in
passenger earnings growth of 16.7% for the next financial year, less than 17.7% expected
this year.

8. Contd..
Banmali Agrawala, president & CEO of GE South Asia called it an
“ambitious and promising budget“ that put significant emphasis on
addressing the needs of passengers and improving freight services.
“The focus on finding innovative solutions in both technical and
financing aspects, to enhance existing infrastructure, mobilize
resources, use new technologies that transform customer experience
and increase operational efficiency are steps in the right direction,“ he
added.
Jaijit Bhattacharya, a partner at KPMG said the operating ratio target
was good and the budget had excellent initiatives in ease of doing
business with the Railways.

9. For details and bookings contact:-
Parveen Kumar Chadha… THINK TANK
(Founder and C.E.O of Saxbee Consultants & Other-Mother )
Email :-saxbeeconsultants@gmail.com
Mobile No. +91-9818308353
Address:-First Floor G-20(A), Kirti Nagar, New Delhi India Postal Code-110015