Two-and-a-half months before railway minister Dinesh Trivedi presents his first budget, the state of the railway finances has become precarious.
Faced with the daunting task of keeping finances out of red, the railways have set up a four-member committee to suggest ways to enable the department to emerge out of the crisis.
The committee will prepare a status report on all the projects financed by multi-lateral financial institutions in the last 10 years, bringing out the delays in execution and the financial impact of such delays.
Set up on November 23, the committee has a six-month deadline for submitting its report. This fiscal, the railways are short of its freight-loading targets by R1300 crore. Passenger traffic has grown but revenue receipts against the head have mysteriously declined, ministry sources said.
The operating ratio (percentage of paisa spent against an earning of R1) have risen to more than 100% in two-thirds of the 17 zonal headquarters of the railways, sources said.
Last month, the railways approached the finance ministry for a bridge loan of Rs 2100 crore, which has reportedly been rejected.
The railways have also been toying with the idea of borrowing money from private banks and floating tax-free infrastructure bonds, sources said.
Internal assessments reveal that against the burden of Rs 20, 000 crore borne by the railways last fiscal towards meeting its operational, maintenance and establishment costs, it will be saddled with a higher load of Rs 25, 000 crore in 2012-13.
“After implementing recommendations of the Sixth Pay Commission and absorbing the burden of the three hikes in diesel fares in the “no fare hike” regime of the last eight years, rail finances are in the pits,” said Shiv Gopal Mishra, general secretary of the All India Railway Men Federation (AIRF).