New Delhi : Terming Railway Budget for 2016-17 as “growth-oriented”, India Inc has said the three new freight corridors envisaged by 2019 will help reduce transportation costs, even as it described the revenue generation target of Rs 1.84 lakh crore as a “strong challenge”.
Dedicated freight corridors and redevelopment of 400 railway stations would foster the transit oriented development and boost the real estate market, property consultants said.
Railway Minister announced India’s first rail auto hub in Chennai and creation of dedicated north-south, east-west and east coast freight corridors by 2019. The Railway Budget spared passengers and goods movement from any rise in tariffs while it announced introduction of three new superfast trains and creation of dedicated north- south, east-west and east coast freight corridors by 2019.
Rajeev Jyoti CEO Railway Business L&T said: “The Railway Minister has been very aggressive to retain a pretty high revenue target of Rs 1.8 lakh crore. I think this is a strong challenge considering there are challenges on GDP growth etc.
“Despite the Pay Commission recommendations, which will hit them by Rs 30,000 crore he is still looking at an operating ratio of 92 per cent which is extremely challenging. He enunciated a lot of actions towards cost saving. Targets of commissioning 2 corridors by 2019 very challenging.” “The focus on completion and implementation of projects is good. The creation of three new corridors will act as a catalyst for reducing the logistics cost,” CII President Sumit Mazumder said.
Commenting on the Rail budget, CBRE South Asia CMD Anshuman Magazine said: “From a real estate and infrastructure perspective the budget had some key announcements focusing on infrastructure such as dedicated freight corridors including three new freight corridors and transit development.” These initiatives if implemented successfully would benefit the Industrial and logistics real estate segment, he added. “However, successful funding mechanisms coupled with timely implementation of all these announcements are necessary to strengthen India’s urban infrastructure,” Magazine said.
“Steel demand in country is expected to get a fillip with the developmental projects proposed including laying of 2,800 kilometers of new railway tracks in the next financial year where railways is poised to commission broad gauge lines at the rate of 7 km per day besides proposed development of three dedicated freight corridors,” SAIL Chairman P K Singh said.
Presenting his second budget in the Lok Sabha, Railway Minister Suresh Prabhu promised rationalising of the tariff structure by undertaking a review to evolve competitive rates vis-a-vis other modes of transport and to expand the freight basket as a means of additional revenue mobilisation. Revenue generation has been targeted at Rs 1.84 lakh crore.
Nalin Jain, President & CEO, GE Transportation said if without increasing freight pricing revenues can be grown then it will automatically better the finances of Railways. The three new freight corridors, north-south will connect Delhi and Chennai, East-West connecting Kharagpur to Mumbai and East Coast from Kharagpur to Vijawada.
