NEW DELHI: The Union Cabinet approved a proposal on Wednesday for setting up an independent regulatory agency for railways which will recommend revision of tariffs and is intended to depoliticise the revision of passenger fares.
After merging the railway budget with the Union Budget, the move is seen as another step in reforming the state-run transporter and in making the process of revision of both passenger and freight fares transparent.
The regulator will have only recommendatory powers, but it could pave the way towards revising passenger fares, which are at present highly subsidised. Freight rates are likely to come down as the cost is likely to be balanced against higher passenger fares, officials said. Successive governments have shied away from taking the “unpopular” decision of increasing fares for over a decade, forcing the railways to bear the loss of around Rs 36,000 crore every year in subsidising the passenger segment.
“The regulator will lay down principles and rules for determining tariff in passenger and freight segments in a transparent manner,” said an official.
The regulator will also ensure fair play and a levelplaying field for private or foreign players. Private investment in the railways has been low be cause of uncertainties and frequent policy changes.
“It will also frame principles on subsidy or social service obligations benefiting the aam aadmi as the higher income group will have to support services for the common man.”
“The authority will be empowered to make suggestions on policies for private investment, to ensure reasonable safeguards to PPP investors and to resolve dispute regarding future concession agreements,” said an official.
The regulator will also lay down standards for efficiency and performance which will lead to customer satisfaction in both passenger and freight services. An official said the authority will also be mandated to check deviations, if any , from the laid-down performance standards and suggest remedial measures which will empower customers -both passengers and freight operators.
The authority will also suggest guidelines for determining track access charge which will ensure better utilisation of dedicated freight corridors.