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Corporate Mar 19, 2012

Why are rail ministers sitting on a Rs 50,000 cr revenue idea?

By Raman Kirpal

Those who still believe that Mamata Didi was right to sack Dinesh Trivedi from the Union railway ministry should rethink!

Two railway unions, representing 13.6 lakh employees, have already issued an extraordinary call for a strike in case the government rolls back the hike in passenger fares.

Firstpost has now stumbled upon another issue which suggests that politicians in power have been handcuffing the railway ministry from raising funds by other means so as to keep passenger fares down.

The opportunity cost of this indecision is as high as Rs 50,000 crore.

The story begins about 20 years ago, when then Railway Minister CK Jaffer Sharief proposed the creating of malls and other commercial complexes at major metropolitan stations in the country. The idea was to invite the private sector to invest in developing prime airspace above railway platforms and tracks and generate huge money. If this policy had been adopted, passenger fare hikes could have been moderated.

The railway unions ask how the government can raise funds if everything is blocked. PTI

The Congress government then sat over the proposal. Twenty years have passed and every year the ministry revives this proposal. Railway ministry sources say that this proposal was raised even during the Atal Behari Vajpayee-led NDA government at the centre. But no government has mustered the courage to clear this proposal.

This time, too, Dinesh Trivedi - who has lost his job for proposing a fare hike - revived the issue, proposing that the railways should use their airspace and build malls over 100 metro stations. He had set up a high-powered committee on moderisation led by Sam Pitroda. And Pitroda said that the railways could mobilise Rs 50,000 crore through a monetisation of surplus land and airspace alone.

The Rail Land Development Authority has identified 10,000 acres of surplus land in urban centres for commercialisation. Sam Pitroda makes conservative estimates of Rs 5 crore per acre and arrives at a figure of Rs 50,000 crore. He recommends monetising airspace above the platforms and rail tracks and immediate induction of a pilot project in the Mumbai suburban railway system.

When presenting the rail budget, Trivedi argued that the ministry would not have had to raise passenger fares once it was allowed to monetise its airspace. "But it will take time and till then the ministry will have to resort to a marginal increase in rates,'' Trivedi had said.

But the Union Cabinet is yet to clear the proposal for the use of airspace above platforms and rail tracks. All over the world, the railways use airspace to generate money. But sources in the government say that the Union cabinet fears that the construction of malls over platforms may lead to overcrowding, which is already plaguing railways stations for many years.

The railway unions ask how the government can raise funds if everything is blocked. "You have not been allowing the railways to raise passengers' fares. You don't want the railways to develop their airspace! What does the government want? Does it desire that the railways too should go the Indian Airlines way?'' asks the union leaders.

by Raman Kirpal

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