RLys to levy user fee as part of train fares soon

New Delhi: Indian Railways will soon start levying a user fee as part of train fares, seeking to raise funds for redeveloping railway stations and modernizing infrastructure to attract investments, Railway Board CEO VK Yadav said on Thursday.

The user fee to be levied by the national transporter for the first time is in line with the user development fee (UDF) paid by air passengers. UDF is charged at various airports and the rate varies from city to city. Railways plans to levy the user fee across nearly 700-1000 railway stations.

“We are going to keep a very small amount for the user charge,” railway board CEO VK Yadav said at a press conference, adding that it would be levied at stations that are being redeveloped as well as those that are not.

“When the redevelopment of the stations gets completed, the money will go to the concessionaires; till then that money will go to the railways for improving facilities across stations. It will be an affordable amount, but it is important to levy if we want to provide world-class facilities similar to the airport developments. We want to upgrade all our major railway stations,” Yadav.

About 10-15% of India’s 7,000 railway stations where the state-run transporter exporter expects higher traffic over the next five years will be covered by the new levy, he added.

The proposal comes in the backdrop of a government plan to attract private investment to the national carrier. Railways plans to redevelop 50 railway stations and monetize its land. The redeveloped hubs will be called Railopolis. Indian Railways will lease the land out for 60 years for commercial purposes.

Niti Aayog CEO Amitabh Kant, who was also present in the press conference, said private investment in Indian Railways will introduce competition and lead to fare reductions in the future.

“We want railways to drive India’s growth story. In countries like Japan and South Korea the growth story was also driven by railway infrastructure. We are confident going forward that railways will contribute 1-2% towards India’s growth,” Kant said.

“It is like when private banks were set up in India. So many private players came into the banking sector. But that didn’t lead SBI {State Bank of India} to shut. Private investment will bring in newer technologies. It will create competition in the railway sector. Competition will increase efficiency and reduce fares in the long run, “ he said.

Apex policy think-tank Niti Aayog had, in October, pulled up the ministry of railways for delayed implementation of the government plan. Niti Aayog recommended that an empowered group of top bureaucrats be constituted to redevelop 50 stations on a priority basis.

The National Democratic Alliance (NDA) government had in 2016 announced a plan to redevelop 400 railway stations during its first term. The cost of station redevelopment was to be met by leveraging commercial development of land and space in and around the stations.

The railway ministry has also begun the process of allowing private companies to run trains on 109 routes, opening up one of one of the government’s most prominent enterprises that has in recent decades been outpaced by the demands of a rapidly growing economy.

“The focus is Make in India, even the global companies that participate in this will have to follow the Make in India norms by DPIIT. This will bring in manufacturing capacity…When Alstom and Bombardier can manufacture metro trains in India, then why can’t trains be manufactured?. Everything will be set up in India,” Kant said.

DPIIT is short for Department for Promotion of Industry and Internal Trade.

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