Railway Budget2015-16

Four Goals

To deliver a sustained

and measurable

improvement in

customer experience

To make the railways a

safer means of travel

To expand railway

capacity and modernise

infrastructure

To make the Indian

Railways financially

self-sustainable

Five Drivers

Adopting a

medium-term

perspective

A white paper

on the

railways

placed today,

a Vision-2030

document to

be released

soon

Building

partnerships

Align with

states, public

& private

sector to

access

funding and

technology

Leveraging

additional

resources

Investment of

Rs 8.5 lakh

crore in next

five years,

mobilised

from multiple

sources

Revamping

management

practices

Improved

accountability,

management

information

systems and

personnel

training

Setting

standards for

governance

and

transparency

Ten Focus Areas

Quality of Journeys

Station Redevelopment

• Budget for passenger amenities up by 67%

• New toilets covering 650 additional stations

• 17000 bio-toilets in coaches

• Built-in dustbin facility in non-AC coaches

• All India 24*7 helpline number 138 to be launched

• Toll free number 182 for women safety

• Unreserved ticket purchase through smart phones;

debit cards

• Online booking of retiring rooms & wheelchairs at

select stations

• 120 crore for lifts/escalators at major stations• Open bid for interested parties for station

redevelopment

• Satellite terminals to decongest cities and provide

services to people in suburbs

Capacity Augmentation

• 84% higher capital allotment for modernization of

1200 kms of tracks at 8686 crore

• 2700% higher sanction for doubling/ tripling/

quadrupling track along with electrifications

• Evaluation studies for introduction of high speed trains

being undertaken

Safety

• Five year safety plan to enhance train safety

• Train protection warning system and train collision

avoidance system to be installed on select routes

• Over bridges and under passes for reducing number of

level crossings

• Development of audio visual warning systems for

unmanned level crossings in collaboration with ISRO

Technology Upgradation

• Innovation council to promote technology

development and manufacturing

• Railways research centres in select universities

• Bar codes/RFID for tracking parcel and freight wagons

• Upgradation of equipment for track examination

Partnerships for Development

• Focus on Public Private Partnerships (PPP)

• PPP cell in Railway Ministry to be made result oriented

• Projects for railway connectivity to many ports and

mines being developed

Ten Focus Areas

Improvement in Management Processes

• Improvement in management processes to further

delegate, de-centralise and de-regulate

• Expand paperless working in material management

system

• Improve existing appraisal mechanism for selection of

projects

• Identification of global benchmarks for key operating &

maintenance activities

Resource Mobilisation

• Tap long term funds such as insurance and pension

funds, multi-lateral and bi-lateral agencies, to finance

remunerative projects

• Launch projects worth 2500 crore through

BOT/annuity route

Human Resources

• Systematic human resources audit to be initiated

• Special training in soft skills for frontline staff

• To set up full-fledged university in 2015-16

Energy and Sustainability

• Setting up environment directorate for focus on

environment management

• Savings of 3000 crore through bidding process and

bilateral arrangement for power procurement

• 1000 MW solar plants funded by Ministry of New and

Renewable Energy to reduce dependence on fossil

fuels

What’s in it for Industry?In his first Railway Budget speech Minister Suresh Prabhu

departed from the usual practice of announcing new trains and

instead focused on increasing long-term investments. The budget

is being seen as a statement of intent of the Modi government to

kickstart growth through higher public investment. The Minister

flagged the lack of adequate investments in railways leading to

bottlenecks in capacity augmentation. In order to make Indian

Railways the prime mover of the economy, he emphasised the

need for collaborating with foreign partners to gain access to

cutting-edge technology and finance. The Minister also

attempted to weave his budget around Prime Minister Modi’s

flagship projects like Digital India, Make in India, Skill India and

Swachch Bharat (Clean India). These measures will heavily depend

on the use of technology to improve passenger amenities,

increase safety and squeeze more efficiency from the

organizational behemoth.

Intent for reforms

In his erstwhile position as the Minister of Power during the

Vajpayee government, he was hailed for reforming the Power

sector. Keeping in mind these credentials, PM Modi brought in

the Minister with the precise mandate to reform the complex

Railway Ministry. The minister is also known to be pro-industry

and he is likely to leverage the private sector more extensively.

Public Private Partnership focus

For the private sector, the Minister announced that the PPP

(public-private partnership) cell of the Railways Ministry will be

revamped to make it more result oriented. JVs will be set up with

States for focused project development, resource mobilisation,

land acquisition, project implementation and monitoring of critical

rail projects. In order to meet the requirements of new lines, JVs

will also be set up with major public sector customers. The

government has announced its intention to interact with Industry

and take further steps to attract investment under PPP through

the BOT and Annuity routes.

Modernisation of the railways and infrastructure

The budget’s focus on modernisation is likely to cheer both the

consumer and the industry, especially the technology sector. The

private sector is likely to benefit from the government’s focus on

infrastructure improvement. The Budget has also proposed

constituting an innovation council called “Kayakalp” for business

re-engineering and introducing a spirit of innovation in Railways

besides setting up of Technology portal to invite innovative

technological solutions. The government is likely to invite

partnerships in activities like station improvements, wagon

purchases, catering, wi-fi, and logistics. Steel, power and infra-

related sectors are likely to be spurred by the intent to improve

freight corridors, track renewal, bridge works and electrification.

The increased focus on improving technology driven ticketing,

signalling, etc. is likely to benefit the IT sector.

Hike in Freight rates

While the budget intends to hike freight capacity to 1.5 billion

tonnes, the Minister has proposed to hike freight rates for 12

commodities in the range of 0.8 per cent to 10 per cent including

urea, cement, coal, iron and steel. The Railways Minister has also

raised the base freight rate by up to 10 per cent. These

announcements are likely to push up prices for commodities in

the near future as well as for cement, steel and power.

What comes next

The railway budget shall now require approval from parliament.

However, plans to reconfigure the Railway Board and to find

solutions to mobilise resources for big-ticket projects are already

under way.

Contact Edelman India Public Affairs

Peter Bellini

Associate Director & Head of Public Affairs

Peter.Bellini@Edelman.com

@EdelmanIndiaPA