New Delhi: Cash-strapped Indian Railways has decided to put nearly 500 long-pending projects on ‘temporary freeze’, after having failed to find loopholes in execution or develop alternate funding mechanisms.
Railway ministry sources told ThePrint that a freeze means “funds will no longer be sanctioned for these projects, but certain token sums may have to be allocated in order to keep these projects alive on paper”.
The token sum is only around Rs 1,000 per annum, but given that the number of projects is 498, it will total up to nearly Rs 5 lakh.
Railway Minister Piyush Goyal revealed the full extent of the problem when he told the Lok Sabha in November that the estimated cost of completing these projects would be Rs 6.75 lakh crore.
Minister of State for Railways Suresh Angadi had said in an interview in October that all pending projects would get completed by 2022. ThePrint made several attempts to contact him for comment, but he remained unavailable.
Burden getting bigger
Official records accessed by ThePrint show that by December 2014, 368 such stalled schemes had been identified. The figure grew to 432 in August 2017 — the 14th report of the parliamentary standing committee pointed out that of these 432 projects, one had been in the works for over 40 years; three for around 30 years; 27 for about 20 years; and 30 for nearly 15 years.
In the six years since the Narendra Modi government came to power, the list has only grown longer. Rajen Gohain, minister of state for railways in the first Modi government, had told the Lok Sabha that 109 projects costing Rs 1,06,485 crore had been sanctioned between 2015-16 and 2017-18.
In this year’s budget, Finance Minister Nirmala Sitharaman sanctioned 37 rail projects, including the construction of five new lines, and doubling 37 lines.
“The railways have been taking on a bigger burden, even as the ministry has remained incapable of finding an alternative mechanism to finance or complete pending projects. The need for the railways today is to start with a zero base,” said Subodh Jain, a former Railway Board member.
“Apparently, the government has been unable to knock off these projects from the list of ongoing schemes because of political pressure, as well as pressure from the engineering department of the Indian Railways. Some departments have a vested interest in the continuance of such projects,” said K.L. Thapar, chairman of the Asian Institute of Transport Development.
The unending projects
The oldest pending project is a 109 km-long line between Howrah and Furfura Sharif in West Bengal, which was announced in the rail budget of 1974-75. Some sections on the line have been made operational, but overall physical progress on the main line remains at 59 per cent. The project has been stalled for nearly 45 years due to inadequate allocation of funds.
Other projects with massive cost estimates include the Ratlam-Dungarpur-Banswara project in Madhya Pradesh and Rajasthan, which was announced in 2011-12. It was supposed to cost Rs 3,450 crore, but physical progress on building the 176.47 kilometre line has remained at 1 per cent. The line was seen as being co-terminus to a solar power plant supposed to be set up at Banswara, but after the UPA government abandoned the plan, the rail line project also seemed to lose relevance. The Rajasthan government also failed to acquire land for the project.
The strategically important Sivok-Rangpo project connecting north Bengal with Sikkim was announced in 2008-09, proposing to connect the Indian Railways network to Nathu La on Sikkim’s border with China. But the 44.39 km-long line has also seen next-to-no progress, despite the projected cost escalating from Rs 3,380.58 crore to Rs 4,190 crore. It has been plagued by land acquisition hassles, as well as pending Centre-state issues on environmental clearances.
The 167 km-long Ankola-Hubli line in Karnataka has remained stuck at around 10 per cent progress, while the project cost has climbed to Rs 2,315 crore, although official documents do not mention the original estimated cost. It has not been allocated in recent years.
Two proposed lines in Bihar have suffered similar fates — the 100 km-long Araria-Galgalia line, sanctioned in 2006-07, and the 188 km-long Sitamarhi-Jayanagar-Susand line, sanctioned in 2008-09. In the first case, the original cost estimate was Rs 828 crore, but by 2016, even an advance payment of Rs 950 crore by the railway ministry was not enough to get the project going, because the Bihar government was unable to acquire land.
In the second case, the projected cost has escalated to Rs 2,444 crore. But because the project was sanctioned by then-railway minister Lalu Prasad Yadav and falls within his party RJD’s sphere of influence, his successors have not been keen to pursue it.
Why these projects have become white elephants
Several projects on the list won’t earn revenue for the railways, but are “socially desirable”.
A large number of them have also continued to linger on account of faulty planning or bad project management.
A third category concerns schemes that had been announced in past years for “political considerations”. In some cases, the ministry has acquired land for a rail project, or for the laying of lines on paper, but local farmers have continued to grow crops on such land.
Ministry officials said no review or assessment has been made about how many of these projects are still needed, or would be useful. Instead, the ministry has decided to freeze certain projects, while prioritising others.
“An exercise in project management is undertaken from time to time. We have now categorised 58 super critical, 68 critical and nine national projects that will get prioritised,” said a ministry official who spoke on the condition of anonymity.
“For one project alone — the Jammu and Kashmir project — a substantial allocation of Rs 3,800 crore has been made in this year’s budget. Another big allocation of Rs 1,600 crore has been made for the Rudraprayag-Karnprayag line (in Uttarakhand),” the official added.
However, categorising the projects in this manner has drawn criticism from the opposition. The Congress’ leader in the Lok Sabha, Adhir Ranjan Chowdhury, who served as minister of state for railways in the UPA government, and flagged two concerns: “By categorising projects in this manner, has the Modi government abdicated its social responsibility by dumping projects that have a low rate of return?
“Second: What about the need to review — or fix responsibility — for schemes that have been dumped after sums in excess of Rs 500 crore have been spent on each of them?”
What experts say
Railway experts are in agreement that there needs to be an exercise to review the pending projects.
“Certain projects cannot be abandoned, as a big amount of money has already been invested. But at least 100-200 projects can be knocked off the list,” said Vivek Sahai, a former chairman of the Railway Board.
“A single-party government led by the BJP was expected to review and categorise the projects. Unfortunately, this has not happened, as the government of the day has been preoccupied with flashy schemes such as the Mumbai-Ahmedabad high speed rail,” he said.
Another former chairman of the Railway Board, Arunendra Kumar, said: “To begin with, the government must identify and review the ten oldest projects and make a decision on whether or not to pursue them. The railways keep getting battered on account of these languishing projects. It is very much possible to drop 50-odd projects from the list.”
Rakesh Tandon, secretary and executive director of the Centre for Train Research and Management (C-TRAM), concurred.
“The government can allocate more money for the pending projects by cutting the huge administrative costs attached to each project. Totally unviable projects need to be deleted,” Tandon said.
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