Rail fares will not be slashed: Suresh Prabhu

  • Srinand Jha, Hindustan Times, New Delhi
  • Updated: Dec 23, 2014 00:54 IST

Clarifying that passenger fares will not be slashed as a result of the reduction in international crude fuel prices, railways minister Suresh Prabhu Monday moved to establish two task forces with the aim of improving the organisation’s financial health.

“Freight earnings have continued to subsidise passenger earnings. Losses in the passenger segment have been mounting. We are not implementing the Fuel Adjustment Component now,” Prabhu said.

The FAC formula provides for a half-yearly exercise of adjusting passenger fares on the basis of market rates of diesel. The FAC adjustment was scheduled this month. With the exercise put off, the railways will be able to save revenue on account of fuel costs,” a ministry official said.

Prabhu has mandated a six-member task force under the chairmanship of Member (Traffic) to generate advertising revenue by leveraging spaces in coaches, wagons, trains and railway stations.

A second task force, under the chairmanship of Member (Engineering) — which has representation from the KPMG and Earnest and Young – will work on strategies to delegate financial powers within the organisation. Both groups will submit their reports by December 26.

Directions have also been issued for the formulation of Integrated Policy on Cleanliness at stations, platforms and coaches which lays down structures for garbage collection, sorting and disposal. The action plan is expected to be finalised by 5th January.

Allaying fears of railway unions, Prabhu said that the organisation wanted “private capital to carry out its enormous task”. “But there is no move to privatise the railways”, he clarified.

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