Difficult year for Indian Railways, Kanpur mishap, revenue shortfall derail Prabhu’s train


Railways had a difficult year grappling with mounting revenue shortfall and facing challenge in expenditure and the Kanpur mishap, one of the worst in decades that snuffed out over 150 lives, exposed glaring safety lapses.

The year 2016 will also be remembered for government taking a historic decision of doing away with separate Rail Budget, Railways undertaking much-awaited changes in restructuring of its administration aiming at introducing accountability in functioning.


On the sunny side, the year saw introduction of new class of services like Mahamanya Express, Gatimaan Express and Humsafar Express redefining passengers travel experience in trains.

Owing to less loadings demand and poor growth in passenger bookings in 2016, there was a shortfall of about Rs 14,000 crore in total revenue earnings besides the cross-subsidy in passenger segment touching at Rs 33,000 crore and the Pay Commission commitments staring at Rs 32,000 crore.

Acknowledging the difficult market condition that the national transporter witnessed during the year, Railway Minister Suresh Prabhu said, “2016 was a difficult year. It was a difficult year in terms of freight. Coal, steel, cement, iron ore all the major commodities that Railways handle witnessed less demand.”

He further said, “There are perpetual issues, like salary burden of Railways is very high. The costs are pre-determined so we can’t do nothing about it. The revenues are dependent on five commodities. So expenditure is a challenge for Railways.

We will start addressing these challenges in 2017 more.”

However, Prabhu said despite challenges, “Railways was ready to handle 1.2 billion of cargo loadings. First time Railways has created such capacity ahead of demand.”

However, derailment of 14 coaches of Indore-Patna Express at Pukhrayan near Kanpur in the early hours of November 21 claiming over 150 lives and injuring more than 200 passengers exposed glaring safety lapses and highlighted the urgent need for a separate safety fund to strengthen and upgrade rail infrastructure.

Though Railway Safety Commission is yet to submit the inquiry report, possible rail fracture highlighting poor maintenance of track seem to be reason behind the accident.

Describing the Kanpur mishap as “unfortunate”, Prabhu said, “We are working on safety fund. We could not complete it in 2016. In 2017, we will have to launch the safety fund. We already had a number of meetings with Finance Minister. I am thankful to Finance Minister for being supportive and Prime Minister is also very keen to support the initiative.”

Looking ahead to 2017, he said, “Despite challenges we took several initiatives in 2016 which will bear fruits later.

In 2017, we are looking to make progress on many new initiatives we have launched.”

Giving an analogy he said, “When you plant a seed you do not see the tree for three years. But suddenly you see sprouts and then tree comes out and it grows fast. This is exactly what is going to happen in Railways.”

He further said, “What we are doing today are all structural fundamental initiatives which will create infrastructure. We are launching ERP, which will create new efficiency standards, new opportunities in addition to the accounting reforms which we have started this year.

“2016 was a year of so many initiatives and also consolidation and 2017 will be completion of so many initiatives we have started,” he added.

Referring to massive station redevelopment programmes across the country and firming up of non-fare revenue in a big way, Prabhu said the capital expenditure has increased substantially in the last two years.

“We have increased capital expenditure by Rs 30,000 crore to 40,000 crore this year and next year we are aiming to touch Rs 1.5 lakh crore,” he said.

Railways undertook station redevelopment programme in coordination with state governments, PSUs and private players across the country enhancing passenger amenities while at the same time earning revenue leveraging its vacant space at rail premises.

Prabhu said 2016 will also be remembered for Rail Vikash Shivir which saw many ideas being generated.

Summing up the activities in the rail sector since he took over the reins, Prabhu said, “2015 was the beginning, 2016 was taking the next step. 2017 will be the year of consolidation and 2018 will be the year of seeing the huge benefits.”


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