Mar 14, 2012 07:04 PM IST | Source:

Rail Budget 2012-13: Key Railway Budget highlights, analysis: Nirmal Bang

Nirmal Bang has come out with its report on Railway Budget 2012-13.

Nirmal Bang has come out with its report on Railway Budget 2012-13.

Our Analysis Railway budget with Safety as Priority! Railway Minister Mr. Trivedi announced Railway Budget for FY12-13 today with a clear focus on Safety and Modernization. Passenger fare prices have been marginally increased across the board for the first time in a decade whereas freight rates were already increased with effect from 5th march. On account of the deteriorating financial health of Railways, we have seen decline in various key investment activities like doubling of line and gauge conversion of line. The increase in Freight rates and Passenger fares are well directed to improve the financial strength of Railways. Overall the railway budget is not encouraging for Railway related companies.

Addition of 725 km new lines in one year: The government has announced that there will be an addition of 725 km new lines (v/s 709 km new lines planned in the last budget) in the next year. The government has also planned 700 km doubling (v/s 750 km last year), 800 km of gauge conversion (v/s 1017 km last year) and 1100 km electrification targeted in 2012-13 (v/s 1000 km last year). The total outlay for each of the above planned activities is Rs. 6872 cr for new lines, Rs. 3,393 cr for doubling, Rs. 1,950 cr for gauge conversion and Rs.828 cr for electrification. This will be negative for the railway companies like Kalindee Rail and Stone India. We expect companies like KEC International and Kalpataru Power to gain from increase in outlay of railway electrification projects.

Key Budget Highlights:

1. Marginal increase in passenger fares across the board.
a. Hike of 10 paise per km for third AC passengers.
b. Sleeper class 5 paise per km.
c. First AC hiked by 20 paise per km.
d. Platform ticket hiked to Rs 5.
e. 2 paise per km hike for 2nd class suburban passengers.
f. 2AC passengers to pay 15 paise more per km.

2. The ministry aims to attract 10% of the Rs 20 lakh cr government expects to spend on infrastructure during 12th Plan.

3. 487 approved projects are at various levels of execution.
4. 17 gauge conversion projects will be completed in FY 12-13.
5. Rs 1102 cr for passenger amenities in FY 13 as compared to Rs 762 cr in previous year.

6. Long Term Goals
a. Plan to upgrade 19,000 kms of tracks in 5 years.
b. To spend Rs. 63,212 cr on track modernization in next 5 yrs
c. To create 100 stations through PPP route in 5 years.
d. Total cost of signaling for five years is Rs 39,110 cr.
e. To bring down operating ratio from 95% to 84.9% in FY13 and 74% at the end of 12th Plan.

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To read the full report click on the attachment

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