More reports on: Infrastructure - general, Railways

Railways may hike fuel price-linked fares despite falling oil prices

15 December 2014

The Indian Railways is expected to announce a hike in passenger fares in the next Rail Budget to be presented early next year, despite falling oil prices, as it passes on the burden of rising power costs to passengers as part of its fuel adjustment-linked tariff revision.

Indian Railways has deferred the fuel adjustment component-linked tariff revision due in December to February to be taken up in the Rail Budget even as the need for upward revision to compensate for high energy costs remain.

The last biennial revision in fuel-adjustment tariff was made in June wherein passenger fares were revised by 4.2 per cent and freight rates by 1.4 per cent. The cost power for Indian Railways has gone up by over 4 per cent in recent months, railway ministry officials pointed out.

The new railway minister Suresh Prabhu had also hinted at the possibility of a fare revision at a recent event.

"Passenger service should be improved before increasing the fares. Safety cannot be compromised. There is a need for big investment. Some burden has to be shared by people," Prabhu, said when asked about the possibility of raising train fares to meet the growing expenses of Railways.

Expressing serious concern over the Railways' financial health, Prabhu had said it is "too close for comfort", even as he highlighted the need for massive investments to meet the safety requirement and upgrading in the rail infrastructure.

"Railways requires big investment. There is no fund for investment. There is requirement of Rs 6 lakh crore to Rs8,00,000 crore for completion of announced projects," he had said.

The minister is in the process of ascertaining views and demands of members of Parliament and various stakeholders, before finalising the Rail Budget.

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