Procurement as a green growth strategy

Procurement as a Green Growth Strategy

In order for government to fulfil its mandate to society, it must undertake large spending initiatives that simultaneously supply its own operation but also provide infrastructure and services for the community at large. Consequently, governments have large and diverse spending strategies on procurement ranging from routine items like stationary, computers, or furniture, to complex spending areas such as utility networks, schools, hospitals or homes. All this equates to substantial investment that can rise to as much as 45 per cent of government budgets, which is around 13 to 20 per cent of gross domestic product (GDP) in industrialized countries, and more elsewhere—35 per cent in South Africa; 43 per cent in India, 47 per cent in Brazil, 52 per cent in Ghana, 49 per cent in Mauritius and 46 per cent in Cost Rica. As such, public sector procurement is a major contributor to industry growth and stability across a wide range of sectors, providing finances and contracts that drive markets for goods and services.

In the procurement of infrastructure and works, governments are adding private investment to their spending through public–private partnerships/private finance initiatives (PPP/PFI). This means that, in addition to the large financial flows from government procurement budgets, private sector investment is also in part being directed by government policy and priorities. In the case of the procurement of works, in the 20 years between 1990 and 2009 there have been more than 1,300 PPP contracts worth more than €5 million signed within the EU, with a combined capital value in excess of EUR250 billion. PPPs ability to provide investment in adverse climates is also demonstrated through the fact that, since 2007, some 350 new projects representing almost €70 billion have reached financial closure within the EU . Moreover, currently accounting for only 4 per cent of total public investment worldwide, figures suggest that PPP has room to grow and the potential to play an even greater role in future public infrastructure investment .

The case for a sustainable approach to government procurement is the desire to harness the massive purchasing power of public sectors to transform industry growth into green industry growth. Not only is it possible to ‘green’ existing industries through sustainable procurement policies, but purchasing power is large enough to also catalyse green growth, as industry and enterprises within the green sector will be willing to invest, innovate and scale up when demand is secure and well directed.

GPP’s ability to stimulate industry growth can be best demonstrated through the elevation of previously niche or restricted green markets into mainstream consciousness. In North America, the domestic market for green electronics, including computers and mobile telephones, was born when the Federal Government began buying green in the early 1990s. Similarly in Europe, public procurement served as the impetus to launch markets for organic food and drink, fuel-efficient vehicles and sustainable timber products.

The influence of GPP is far reaching, as prioritizing sustainability considerations in government purchasing create positive externalities across both the domestic economy and international supplier chains: Through GPP, government can:

                [i]Support the implementation of environmental policies on water and energy efficiency, waste management, renewable energy supply, resource efficient and cleaner production, lower greenhouse gas emissions and more.

                [ii]By ensuing scaled up and long term demand, provide an incentive for investment and innovation on sustainable products, services and works.

                [iii]Improve transparency and efficiency in procurement processes.

                [iv]Realize cost savings in the construction and operation of public assets and services

                [v]Support the introduction of new and improved sustainable goods, services and works into the market.

Environment and security

Environment and security

The “environment and security” movement, if it can be called that, was born from a deepening public
concern in the 1960s and 1970s over environmental degradation. This growing environmental awareness
resonated against a nerve-wracking backdrop of Cold War uncertainty. Subsequently, a series of events—
international meetings on the one hand and man-made environmental disasters on the other—illustrated
some of the important links between the environment and our security.
In 1972, a United Nations conference on Human Security was convened in Stockholm under the leadership
of Maurice Strong. Although the conference was rooted in the regional pollution and acid rain problems of
northern Europe, it led to the creation of the United Nations Environment Programme (UNEP) and many
other national environmental organizations. These organizations have been central to subsequent
multilateral environmental cooperation and dialogue.
The OPEC oil crisis in the 1970s fuelled the debate over the ecological carrying capacity of the earth as well
as the political ramifications of dispute over scarce resources. Meanwhile, the Three Mile Island nuclear
accident in 1979 and the toxic chemical gas leak in Bhopal in 1984, to pick just two examples, graphically
demonstrated some of the environmental dangers of a modern, changing economy.
In 1987, the report of the World Commission on Environment and Development, chaired by Norwegian
Prime Minister Gro Harlem Brundtland, was released. Titled Our Common Future, it wove together
environmental, economic and social issues and helped to popularize the term, “sustainable development.”
A new world “disorder”
The initial relief at the end of the Cold War, the return to democracy in Eastern Europe, German
reunification and multilateral cooperation against Iraq’s invasion of Kuwait in the 1991 Gulf War led many
to herald the dawn of a “new world order.” This, it was believed, would be one that respected human rights
and the rule of law, and in which the United Nations would finally begin to function as originally intended
by its founders.
Symbolic of a renewed interest in multilateralism, the Rio Earth Summit in 1992 saw the largest ever
gathering of world leaders tackle questions of the environment and development. For perhaps the first time
it seemed that the environment had become a matter of considerable international attention.
However, optimism over this supposed new world order was soon dashed by the gruesome images of
conflict across the world in Rwanda, Burundi, Somalia and Bosnia. The inability of the international
community to reach consensus on the best, or indeed any, course of action, undermined confidence in a
new form of assertive multilateralism.

This inaction gave free reign to some of the worst excesses of civil war—ethnic cleansing and genocide on a
scale not seen since the Second World War. Ethnic conflict was often total war, involving intractable
guerrilla battles and great loss of civilian life. As the experience of trying to mediate the conflict in the
Balkans proved, this form of conflict was also highly resistant to resolution.
Environment and security research since the Cold War
The dramatic rise in intra-state conflict in the early to mid-1990s led many academics, commentators and
policy-makers to search with some urgency for an explanation; often looking for answers outside traditional
models of state security. This debate has taken two major, interrelated paths.
First, has been a redefinition of what we should understand by security in the post-Cold War world. Second,
has been empirical research to try and discern whether and how environmental change might threaten
peace.
This redefinition has prominently featured environmental considerations. Speaking at the launch of the 1997
Human Development Report of the United Nations Development Programme (UNDP), Dr. Mahbub ul
Haq succinctly expressed a new vision of security shared by many. He argued that, “[s]ecurity is increasingly
interpreted as security of people, not just territory; security of individuals, not just of nations; security
through development, not through arms; security of all people everywhere—in their homes, in their jobs, in
their streets, in their communities, and in the environment.”
In 1994, journalist Robert Kaplan wrote a highly influential article, “The Coming Anarchy,” that painted a
bleak picture of a West African descent into endemic conflict fuelled by spiralling population growth,
environmental degradation and easy access to arms. Based on early environment and security research, the
future he portrayed was one of “disease, overpopulation, unprovoked crime, scarcity of resources, refugee
migrations, the increasing erosion of nation-state independence and international borders, and the
empowerment of private armies and drug cartels.”
Kaplan’s analysis of West Africa attracted a great deal of attention. Even more alarmingly, Kaplan argued
this volatile and destructive mix was gaining critical mass elsewhere in the world. By arguing that the result
for Northern countries might be mass inward immigration from failed developing states, he played deftly to
the unspoken fears of the developed countries. However, “The Coming Anarchy” failed to give due credit
to societies’ capacity to adapt to environmental change, nor to the potential for international action to rein
in trade in those resources used to fuel conflicts
Four approaches to environment and security
Since the early 1990s, a great deal of research has tried to elaborate our understanding of the relationship
between environment and security. This body of work can be simplified into four discernible but
interconnected approaches.
First is the Toronto school, which is the name given to the research groups led by the University of
Toronto’s Thomas Homer-Dixon. This approach focusses, like Kaplan’s, on resource scarcity as a cause for
insecurity and conflict. The Toronto school argues that simple scarcity as a result of environmental change
and population growth is only part of a much more complex picture. They focus on situations where elites
extend their control over productive resources (in a process called “resource capture”) and displace poorer
communities (“ecological marginalization”). Resource capture and ecological marginalization, they argue,
may lead to conflict (as people resist marginalization) and environmental damage (as displaced people move
into fragile, marginal environments). In some cases, this process may be connected to state failure and
political violence, especially in developing states where insurgencies are fuelled by grievances related to
injustice and inequity.
A second approach is proposed by the Swiss Environment and Conflicts Project (ENCOP) led by Günther
Baechler. ENCOP research links environmental conflict more directly to a society’s transition from a
subsistence to a market economy. They argue that violence is most likely to occur in more remote areas,
mountainous locations and grasslands—places where environmental stresses coincide with political tensions
and inequitable access to resources. In many cases, conflict occurs where communities resist the
expropriation of resources and the environmental damage caused by large-scale development projects.
A third approach, linked to the International Peace Research Institute in Oslo (PRIO) amongst others, takes
an entirely different starting point. PRIO suggests that violence in many developing countries occurs when
different groups attempt to gain control of abundant resources. World Bank studies indicate that countries
heavily dependent for their income on the export of primary commodities are at a dramatically higher risk of
conflict than other poor countries, particularly during periods of economic decline. Other studies suggest
that many wars concern control over revenues from valuable resources—especially so if they are easy to
transport and hard to trace. Examples include: illegal timber in Burma, diamonds in Sierra Leone or coltan
in the Democratic Republic of Congo.
A fourth approach argues that environmental degradation is one of the many “network threats” that face
the world. Climate change, like epidemic disease or international terrorism, is an example of a network
threat. People make decisions about their energy use based on their immediate social, economic and
ecological surroundings. These decisions constitute an informal, transnational web of individual behaviours
that ultimately present a truly global security problem. Like epidemic disease, the threat is dispersed, and so
is difficult to neutralize through negotiations or force. And although climate change could be extremely
dangerous and costly, it is hard to identify an effective mitigation policy, since no single incentive structure
can modify the behaviour of all the actors. In a 2004 article, Richard Matthew and Bryan MacDonald argue
this idea holds important lessons for future environment and security research. However, absent from much of the academic literature on environment and security are practical recommendations for how environmental protection and natural resource management could help prevent and resolve conflict. According to Simon Dalby, the assumption that the environment is separate from humanity and economic systems lies at the heart of the policy difficulties facing sustainable development and security thinking. Whatever the reason, the result is that much of the academic research has yet to articulate concrete tools for policy-makers.
Some observations on the links between environment and security

Experience shows us that conflict can be driven by natural resource degradation and scarcity, and by
competition for control where resources are abundant. Ask an ecologist and a political security analyst to
name countries of gravest concern to them, and though their points of departure are different, their final
lists would look remarkably similar: Afghanistan, Bangladesh, Haiti, Indonesia, Iraq, the Great Lakes region,
the Solomon Islands and Somalia, among others. Indeed, the award of the Nobel Peace Prize to a Kenyan environmentalist in 2004 underlines the relevance of environmental issues to global security.The connections between environmental change and human security are many and complex. On the one hand, our environment affects our security by undermining livelihoods, or by leading to conflict over scarce
or abundant resources. On the other hand, insecurity can have a negative impact on our environment
through, for example, the ecological impacts of large refugee movements or warfare itself. However,
environmental concerns can also present opportunities for dialogue; non-military mechanisms for
communication; and greater mutual understanding.
All too often the environment and security literature seems to focus on the developing world as the both the
victim and the villain of environmental insecurity. However, the developed countries’ habit of unsustainable
consumption is at the heart of many conflicts over both scarce and abundant resources in the developing
world. Throughout much of the 1990s, for example, war over diamonds in Sierra Leone continued, at least
in part, because diamond markets in the North were blind to the provenance of those diamonds.
It should be mentioned that there is, as yet, no robust empirical link between environmental stress and the
start of violent conflict. Environmental factors are rarely, if ever, the sole cause of conflict; ideology,
ethnicity and power politics are all important factors. However, it is clear that environmental stress increases
the severity and duration of conflict. That said, efforts to develop robust empirical forecasts of violent
conflict on the basis of environmental information have had a poor record of success, due to the complex
interaction of social, political and economic factors involved.

THE INTERIM RAIL BUDGET 2014

The  Interim Rail Budget 2014.

1. Madam Speaker, I rise to present before this august House the Revised Estimates for 2013-14 and the Estimated Receipts and Expenditure for 2014-15.

2. The Estimates for 2014-15 are for the whole year, but, at present I seek from the august House a ‘vote-on-account’, sufficient to cover the estimated expenditure for the first four months of the fiscal. The Hon’ble Members are aware that requirements for the remaining part of the year would be voted later, separately.

3. This is my maiden Budget under the inspiring guidance of the Hon’ble Prime Minister and Chairperson UPA, to whom I am grateful for the responsibility entrusted to me. I also wish to profusely thank the Finance Minister for his continued support and encouragement to the Railways, underlined further by his recent gesture of providing additional budgetary support for meeting pressing requirements of a few national projects during the current fiscal.

4. Madam Speaker, the name of Indian Railways evokes fond childhood memories amongst all of us who have grown with this beautiful system. Railways influence all aspects of our lives and untiringly carry people and materials to every nook and corner of the country. Its role in national integration by providing low cost connectivity from Kashmir to Kanyakumari on one hand and Arunachal, Mizoram and Tripura to Gujarat on the other, is unparalleled.

5. As an organization, Railwaymen take pride in serving the nation, braving snow, torrential rains, floods and desert storms on the one hand and misdirected public or terrorist wrath on the other. Madam, I have hardly spent eight months with Railways but I confess that I have an inner feeling of a lifelong association. It is my firm view that this pan Indian organization needs careful nurturing to help it better serve the people and play its role in building the nation.

6. During my short stewardship of the Indian Railways, I have been flooded with requests for new projects of New Lines, Gauge Conversion, Doubling and new Factories, new trains, and suggestions for improving the services of the system. While Railways continue to deliver services ungrudgingly in spite of constraints of resources, both physical and financial, it is high time that we take a serious note of its urgent investment and other needs. Railways are a strong engine of development and help mainstreaming our citizens in less developed areas of the country. Therefore, it is critical for the Railways itself to be restored to a more central place in the national planning.

7. As the UPA II Government completes its five years journey in May this year, it is time to take stock of Indian Railways’ achievements and also lay the road map for the organization. I would like to share some of the key recent initiatives, which have led to build up of confidence of our countrymen and instilled a sense of pride amongst a committed railway workforce of about 14 lakh persons: i. National Project of Kashmir witnessed a major landmark last June, when 11.2 km long tunnel linking Banihal with Qazigund in the valley became operational. The tunnel, which is an engineering marvel, has reduced the distance from 35 km to 17.5 km., provides an all-season means of transport for the local population and is proving a boon for the inhabitants.

Also, construction on Udhampur – Katra section, which will enable lakhs of pilgrims from all over the country to reach foothills to Vaishno Devi shrine directly, has been completed and trial runs have started. We expect to run passenger services up to Katra very shortly; ii. During the XI Plan period, the targets for newlines, doubling and electrification were exceeded. Railways completed 2,207 km of newlines against target of 2,000 km, doubling of 2,758 km against 2,500 km and electrification of 4,556 km against a target of 4,500 km.

During the 12th Five Year Plan period, Indian Railways infrastructure will further expand to reach the hinterland and frontiers of our nation; iii. Similarly, rolling stock acquisition also surpassed the targets and 64,875 wagons were acquired against target of 62,000, a total of 1,288 diesel locos were produced against 1,019, and 1,218 electric locos against a target of 1,205; iv. Initiatives taken for construction of two dedicated freight corridors on the eastern and western routes would lead to strategically critical capacity augmentation, and would involve construction of dedicated freight lines to carry predominantly coal and steel on the Eastern Corridor and containers on the Western Corridor. Dedicated Freight Corridor is an innovation in rail transport in India and will reduce the transit time to about half of the present levels. The capacity released by freight trains could then be used for running more passenger trains at higher speed in a need based manner.

This initiative would also offer significant reduction of Green House Gas emissions in transport sector of India;

v. Railways successfully met the heavy impact of 6th Pay Commission in full during the period. Total additional payout including arrears from 1st January 2006 has been more than Rs one lakh crore till now. Significantly, unlike other segments of the Government, Railways met the additional expenditure within its own means, from its own earnings. The huge requirement did cause some hardships, but the organisation successfully overcame them and emerged stronger.

Significantly, but for the additional financial burden caused by the Pay Commission, the resource position of Railways would have been correspondingly that much healthier; vi. Extension of rail connectivity to the northeastern states has been a focus area of our government to bring prosperity to these areas and also strengthen the national integration. I am happy to inform the august House that as a result of additional financial support provided to Railways at the instance of the Hon’ble Prime Minister, we are now on course to convert the strategically important 510 Km long Rangiya - Murkongselek Metre Gauge line into Broad Gauge within this financial year. vii. The Capital of Arunanchal Pradesh would soon be on rail map in this financial year, as Harmuti-Naharlagun newline is expected to be commissioned shortly. The state of Meghalaya is also all set to come on the Railway map in this financial year, as Dudhnoi – Mehendipathar newline is getting completed by March 2014; viii. Expansion of Railway Network: During the year we completed 1,532 km of New Line, Doubling and Gauge Conversion against a revised target of 1,525 km. Sections commissioned in 2013-14 include: New Lines

a. Karur – Salem (85 Km) b. Koderma – Nawadih (34 Km) 3

c. Lalitpur – Tikamgarh (51.5 Km) d. New Morinda to Sanewal (54 Km) thereby complete commissioning of Chandigarh – Ludhiana e. Qazigund – Banihal (19 Km) f. Kadur – Chikmaglur (46 Km) Gauge Conversion:

a. Hanumangarh – Sriganganagar (64Km) b. Manamadurai – Virudunagar (67 Km) c. Darum Madhepura – Murliganj (22 Km) d. Kolar – Chickballapur (85 Km) e. Rangiya – Rangapara North – Dekargaon (145 Km) Doubling:

a. Panskura – Shyamchak (27 km) 3rd Line b. Muri – Tulin (1.5 km) Doubling 2nd Bridge over River Subernarekha c. Jirat – Ambika Kalna (20.23 km) d. Magrahat – Diamond Harbour (15 km) e. Kursela-Karagola (17 km) f. Katereah-Kosi cabin (4km) g. Madur – Mandya (19 km) h. Birur – Ajjampur (18km) ix. Three new factories viz. Rail Wheel Plant in district Chhapra, Rail Coach Factory at Rae Bareli and Diesel Component Factory at Dankuni have become functional and commenced production; x. Specially designed coaches for adverse weather conditions have been inducted for rail travel in Kashmir Valley.

Also corrosion resistant and lighter wagons with capability to carry extra pay-load and higher speed potential up to 100 kmph have been developed; and xi. Railways have been promoting sports since 1928. In the year 2012-13, we recruited about 500 sports persons. I take pride in stating that Railways’ sportspersons have a dominating presence in the national teams in various disciplines and won titles in 23 disciplines and were runners up in 9 disciplines in various national events. Our sportspersons have also represented the country in various International Championships and won a total of 2 Gold, 4 Silver and 3 Bronze Medals.

8. Madam, Indian Railways had formulated Policy Unigauge in the year 1992 to convert selected Metre/Narrow Gauge routes to Broad Gauge to avoid transhipment, improve rolling stock utilisation, achieve higher throughput and to foster development in various parts of the country. I am happy to report that a total of 19,214 km of non-Broad Gauge lines have been converted to Broad Gauge. People in several States including Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Karnataka, Uttar Pradesh, Assam and Tamil Nadu have been the major beneficiaries.

9. Madam, this august House has in the past expressed deep concern over some unfortunate accidents and I painfully acknowledge my anguish and grief at the loss of lives. However, I must assure the House that safety is never compromised on the system and several measures have been and are being taken for its further strengthening. Some of these are :

i. Manning or elimination of all unmanned level crossings and provision of ROBs/RUBs in lieu of manned level crossings with heavy traffic density in a time bound manner is a commitment of Railways. Towards this end, a total of 5,400 unmanned level crossings were eliminated – 2,310 by manning and 3,090 by closure / merger / construction of ROBs/RUBs during the last five years;

ii. Planning for induction of indigenously developed Train Collision Avoidance System (TCAS) over Indian Railways after successfully completing field trials;

iii. Provision of improved safety systems with audio visual warning to road users in advance of approaching trains;

iv. Development of ‘crashworthy’ structural design capable of absorbing high impact loads in unfortunate case of collision/accidents;

v. Offering employment to over 1 lakh persons against existing vacancies in Group C categories in the last five years, and to 1.6 lakh persons in erstwhile Group D categories; vi. Provision of Vigilance Control Device (VCD) in all electric and diesel locomotives to monitor and judge the alertness of driver to ensure safety of the train; vii. A few unfortunate accidents involving fire in trains have occurred in the recent past, leading to loss of precious lives. Even though some of these incidents were caused due to inadvertent acts of negligence on the part of passengers, Railways have initiated action to ensure that such incidents are averted at all costs and loss of lives eliminated. A Comprehensive Fire and Smoke Detection System is on trial on two rakes of Rajdhani Express trains. Based on the success of these trials, this will be extended to all major passenger trains; and

viii. Besides, various measures undertaken to prevent fire incidents on trains are as under:

a. Use of fire retardant materials inside coaching vehicles;

b. Multi-tier protection for electric circuits;

c. Provision of portable fire extinguishers in AC coaches, Guard-cum-luggage break vans, pantry cars and locomotives;

d. Introduction of electrical induction based cooking appliances in replacement of LPG in pantries and e. Intensive checks on parcel vans and Guard-cum-luggage break vans against explosives and inflammable materials. Financial Health

10. Madam, I firmly believe that Indian Railways is primarily a commercial organization and it must operate in a financially self sustaining manner. Major segments of its business - freight as well as passenger - should be market driven, address needs of users, provide value for money and avoid tendencies to exploit its dominant presence in the transport sector.

11. Inadequacy of financial resources is a key constraint to Railways following the desired path. Aspirations of the people channelized through their elected representatives for extending the rail network to their regions are all valid and need to be respected. In fact, Railways have happily acknowledged and accepted many of these. Despite limited availability of funding, Railways have been able to implement and complete many projects of new lines, doubling, gauge conversion, metropolitan transport, road over/under bridges in addition to construction of workshops, improvement of user services and electrification.

12. I wish to place on record my appreciation of the initiative of the State Governments of Karnataka, Jharkhand, Maharashtra, Andhra Pradesh, and Haryana for agreeing to share cost of several Rail projects in their respective areas, and appeal to other State Governments to follow suit. This will go a long way in catalysing creation of Rail infrastructure for overall national growth. 6

13. While efforts of the government to provide precious financial resources for growth of Indian Railways would undoubtedly continue, the phenomenal investment needs of rail infrastructure cannot be met entirely through Gross Budgetary Support, Internal Generation of Railways and Market Borrowing. Railways have therefore started targeting private investment in rail infrastructure to bridge the gap. Public Private Partnership (PPP)

14. Investment in Railways is being stepped up by partnership with the private sector. PPP projects related to rolling stock manufacturing units, modernisation of railway stations, multi-functional complexes, logistics parks, private freight terminal, freight train operations, liberalised wagon investment schemes, and Dedicated Freight Corridors are in the pipeline and offer excellent opportunities for private investment in the 12th Plan.

15. Apart from attracting private investments from domestic investors in rail sector, a proposal is under consideration of the Government to enable Foreign Direct Investment (FDI) to foster creation of world class rail infrastructure.

16. Rail Land Development Authority was set a challenging target of raising Rs 1,000 crore in the Budget 2013-14. I am happy to report that they are on course and have already raised Rs 937 crore so far. Modernisation and Technology Induction

17. Within available resources, Indian Railways have always endeavoured to usher in new technology for modernisation and enhanced delivery to rail users. Dedicated Freight Corridors for exclusive running of heavy haul freight trains, High Speed Trains Project, and Semi-High Speed project are recent initiatives taken in this direction. Dedicated Freight Corridor Project

18. Implementation of the Eastern and Western Dedicated Freight Corridors project is making good progress with the award of nearly 1,100 km of civil construction contracts till now. During 2014-15, another 1,000 km of civil construction contracts are targeted, besides award of Systems contracts. High Speed Trains Project

19. As agreed between Honourable Prime Ministers of India and Japan in May 2013, a joint Feasibility Study for Mumbai-Ahmedabad High Speed corridor, co-financed by Indian Railways and Japan International Cooperation Agency (JICA), has started in December 2013, and will be completed in 18 months.

For the same corridor, a Business Development study being undertaken by French Railways (SNCF) will be completed by April 2014. After the studies, Indian Railways will decide on further course of action and modalities for implementation of the project.

Semi-High Speed Project

20. Besides the High Speed project, Indian Railways also intend to explore low cost options for raising speeds to 160-200 kmph on existing select routes like Delhi-Agra and Delhi-Chandigarh. Green Initiatives

21. Madam Speaker, the role of Indian Railways in preserving the environment has been widely acknowledged. Besides energy efficiency of rail transport, initiatives to promote use of renewable and clean energy have been part of our approach. Railway Energy Management Company has become functional and is working on setting up of windmill plants, solar power plants, with about 40% subsidy from Ministry of New & Renewable Energy. To begin with, 200 railway stations, roof top of 26 buildings and 2,000 level crossing gates would be covered. 22. I take great pride in informing the august House that as an eloquent testimony to our energy conservation efforts, Railways bagged

22 out of 112 awards being given away by the Government in 2013.

23. With a view to improving aesthetic ambience along the track close to the approach of major stations, creation of ‘Green Curtains’ at Agra and Jaipur stations is being undertaken on pilot basis. This will involve construction of RCC boundary wall of appropriate height along the railway boundary up to a suitable distance, landscaping from the track to the wall and within station circulating area, and arrangements for appropriate watch and ward to check open defecation and littering. Once the pilot projects succeed, we intend to invite corporate entities to participate in this programme at other stations through their Corporate Social Responsibility initiatives, besides obtaining support of municipalities and local bodies.

24. Marking a major development towards cleanliness in the coaches and on railway tracks, a bio-toilet design has been adopted by the railways and the technology has been introduced in about 2,500 coaches. It is proposed to increase the coverage progressively. 8

Passenger Friendly Initiatives

25. Indian Railways has always strived to improve its customer related services and the continued drive has resulted in their gradual improvement. The success of e-booking of tickets has surpassed all expectations and provided a convenient means to our customers to interface with the Railways from the comfort of their homes and offices.

Train movements can also be tracked online to find the exact location and running. Besides, 51 Jan-Ahaar outlets for sale of Janta Meals have been set up; 48 passenger escalators have been commissioned at railway stations and 61 more are being installed; air-conditioned EMU services will commence in Mumbai area by July 2014; and Passenger Information Display System in important trains to indicate the next station and expected arrival time is being provided.
26. The scheme for upgradation of passengers introduced in the year 2006 is proposed to be extended to second class sitting, AC Chair car and Executive chair car passengers. This will facilitate utilisation of vacant accommodation in the higher classes and optimise demand satisfaction in the lower classes. Demand Management through Dynamic Pricing

27. There are seasonal and occasion-specific instances when the demand for travel by certain trains goes up and the level of demand satisfaction becomes low. Passengers are prepared on such occasions to pay more to undertake their journey. Keeping this in view, a Premium Air-Conditioned Special was introduced on the busy Delhi – Mumbai sector with shorter Advance Reservation Period in December 2013 – January 2014. The fare charged included a dynamically varying premium over tatkal fare of the Rajdhani services. Such dynamic pricing was widely appreciated by the users and the media and gave increased earnings of about 48% as compared to Rajdhani services on the same sector. We are considering operation of this scheme on larger scale. Enhancing Market Share

28. Railways propose to lay further emphasis on improving its market share through a mix of strategies. These would involve inter alia improved use of assets, including wagon turn round by ensuring improved operation and maintenance practices to enhance asset availability, intensive monitoring and improvement in the condition of freight terminals through result oriented investments, and laying emphasis on completion of various on-going line capacity works on critical sections. 9

29. In addition to the above measures, Indian Railways is also further enhancing throughput by clearing missing links in ‘CC+8’ (Carrying Capacity+8 tonne) routes, increasing freight train speed by upgrading the rolling stock as well increasing the length of trains, besides introducing a tariff and incentives regime that encourages shift of traffic to rail and minimizes empty running. All these measures will ensure that the unit cost of operation is brought down further. Rail Tariff Authority

30. Madam, In a path breaking decision, an independent Rail Tariff Authority is being set-up to advise the Government on fixing of fares and freight. Determination of rates will no longer be an exercise behind veils where the Railways and the users could only peep covertly at what was happening on the other side.

31. The Rail Tariff Authority will not only consider the requirements of the Railways but also engage with all stake-holders to usher in a new pricing regime through a transparent process. This would lead to an era of rationalisation of fares and freight structures for improving the fare–freight ratio and gradually bringing down cross subsidization between different segments. It is expected that this would go a long way towards improving the financial health of the Railways, lead to growth to match expectations of the nation and provide stability by minimizing volatility of revenue streams. Information Technology

32. Madam, Information Technology has revolutionized our customer interface over the last few years. We intend to continue the process. Some of the initiatives that would be taken are -proliferation of cash accepting Automatic Ticket Vending Machines; Ticketing on mobile phones in the unreserved segment; PNR status update to passengers through system generated SMS; an update for train running information; Online booking of retiring rooms at all important stations; Online booking of meals on trains for selected en-route stations; Introduction of e-forwarding note and electronic transmission of railway receipts for freight customers, which will enable users to carry out freight business with Railways from the comfort of their homes and offices; and Computerisation of claims settlement process on Indian Railways.

Revenue Freight Traffic

33. A target of loading 1,047 million tonnes during 2013-14 was set for Indian Railways. I am happy to inform the House that we would surpass the Budget estimate.

34. In order to increase the share of rail borne traffic, an innovative “Empty Flow Discount Scheme” is being formulated and will be implemented shortly. For further increasing throughput on the existing network, carrying additional traffic and bolstering freight earnings, universalisation of all routes on Indian Railways as ‘CC+9+1’ (Carrying Capacity+9 tonne+1 tonne) is being planned.

35. Container traffic has witnessed rapid growth in the last few years. For facilitating seamless transport of imported cargo, some of the restrictions on movement of imported commodities through containers have been eased. Further, to increase throughput of container traffic, the permissible carrying capacity of 20 feet containers has been enhanced by 4 tonnes by necessary upgrade of rolling stock.

36. There is a vast potential to be tapped in the area of parcel traffic. An aggressive strategy has been evolved for attracting more such traffic to rail. Parcel trains will be run from nominated parcel terminals which have been already notified for achieving the above, and Special Parcel Trains will be run on scheduled timings, so that time-sensitive cargo can be attracted. A new policy on parcels will be formulated which shall also encourage transportation of milk across the country. A new concept of hub and spoke for parcel business will be introduced. Third party warehousing in Special Parcel Terminals is also envisaged. Financial Performance, 2012-13

37. Madam Speaker, I would now like to present in brief the final results for the previous fiscal, 2012-13. I am happy to report that the freight loading by the Railways at 1,008 million tonnes surpassed the revised target of 1,007 million tonnes. Railways paid full dividend of Rs 5,389 crore to the General Exchequer. The Operating Ratio finally achieved was 90.2%, an improvement over 94.9% in 2011-12. The Fund balances, which were at negative Rs 385 crore at the beginning of the year, finally closed at a positive Rs 2,391 crore even after full repayment, including interest, of the loan of Rs 3,000 crore taken in the previous year. 11

Financial Performance, 2013-14

38. Given the promising trend of loading, the target has been scaled up to about 1052 million tonnes from the budget target of 1047 million tonnes. However, the average lead of freight traffic is falling, and is likely to be 622 km against budgeted 644.5 km. Yet, we are confident of surpassing the freight earnings target which has been increased to Rs 94,000 crore from Rs. 93,554 crore in Budget Estimates.

Considering the trend of passenger earnings, the revised target has been kept at Rs 37,500 crore.

39. There has been continuing strong inflationary pressure on the input costs, especially the cost of fuel, both HSD Oil and electrical energy.

There has also been a higher than expected burden on account of significant fresh recruitment in many safety categories, additional dearness allowance for Railway employees and dearness relief for Railway pensioners.

Yet, as a result of stringent and close monitoring, the increase under Ordinary Working Expenses has been kept at a modest Rs 560 crore only. However, pension allocation requirements have gone up by a more significant Rs 2,000 crore.

Dividend payment to General Revenues has also gone up by Rs 1,591crore with the increase in the rate from 4% to 5%.

40. Considering the trend of earnings and expenditure, the revised plan outlay stands at Rs 59,359 crore.

Operating Ratio of Railways is likely to be 90.8% as against budgeted target of 87.8%.

41. I would like to assure the House that continuing the happy trend of 201213, and in a marked improvement from the two earlier years, Railways will end the current year with surplus, and fund balances would increase from Rs 2,391 crore at the beginning of current fiscal to Rs 8,018 crore at the end of March, 2014.

This is primarily attributable to strict fiscal discipline enforced by the organisation. Budget Estimates, 2014-15

42. Madam, I shall now deal with the Budget Estimates for 2014-15.

43. Anticipating a healthier growth of economy, the freight traffic target is proposed at 1,101 million tonnes, an increment of 49.7 million tonnes over the current years’ revised target of about 1052 million tonnes.

44. The Budget Estimates for goods, passenger, other coaching and sundry other earnings have been kept at Rs. 1,05,770 crore, Rs. 45,255 crore, Rs 4,200 crore and Rs. 5,500 crore respectively in 2014-15. The Gross Traffic Receipts have been projected at Rs. 1,60,775 crore.

45. Madam, Ordinary Working Expenses have been proposed at Rs. 1,10,649 crore, which is Rs. 13,589 crore higher than the Revised Estimates for the current year. This will take care of additional requirements on account of fresh recruitment, increase in dearness allowance rates, increase in fuel bill, higher lease charges payable to IRFC and general inflationary increases. Pension outgo has been budgeted at Rs. 27,000 crore, as against Revised Estimates, 2013-14 of Rs. 24,000 crore.

Total Working Expenses are budgeted at Rs. 1,44,199 crore as against Rs. 1,27,260 crore in Revised Estimates, 2013-14. This will leave a Net Revenue before dividend of Rs. 19,655 crore, and operating ratio of 89.8%. Dividend payable to General Revenues is estimated at Rs. 9,117 crore. It is estimated that at the end of 2014-15 the balance under the Railway Funds will be Rs 12,728 crore as against Rs 8018 crore in Revised Estimates, 2013-14. Annual Plan 2014-15

46. The Annual Plan 2014-15 envisages investment of Rs. 64,305 crore as against Budget Estimates 2013-14 of Rs. 63,363 crore and Revised Estimates, 2013-14 of Rs. 59,359 crore. The Budgetary Support from General Revenues has been proposed at Rs. 30,223 crore including Rs. 1,223 crore as Railways’ share from Diesel Cess, and Rs. 6,000 crore earmarked for National Projects. Internal Generation component in the Plan has been kept at Rs. 13,500 crore, besides a drawdown of Rs. 777 crore from the available balance in the Railway Safety Fund. Extra Budgetary Resources including market borrowings through IRFC, ‘PPP’ and other schemes has been pegged at Rs. 19,805 crore.

47. Madam, I would like to thank all the Parliamentary Committees including the Railway Convention Committee for their full support. New Services

48. Madam, I have received several demands for new trains. The existing congestion on many of our routes does not permit the railways to increase the number of trains. Besides, running of more passenger trains also affects the freight carrying capacity of railways. Yet I am conscious of the responsibility devolving on the railways towards addressing requirements of the people for additional trains in a need and merit based manner. Despite severe constraints, I am happy to inform the august House that we have decided to introduce a few new trains during 201415.

49. Premium Trains:

i. Howrah – Pune AC Express (Bi-weekly) via Nagpur, Manmad

ii. Kamakhya – New Delhi AC Express (Weekly) via Chhapra, Varanasi

iii. Kamakhya – Chennai AC Express (Weekly) via Malda, Howrah

iv. Mumbai – Howrah AC Express (Bi-weekly) via Nagpur, Raipur

v. Mumbai – Patna AC Express (Bi-weekly) via Khandwa, Itarsi, Manikpur vi. Nizamuddin – Madgaon AC Express (Bi-weekly) via Kota, Vasai Road vii. Sealdah –Jodhpur AC Express (Bi-weekly) via Mughalsarai viii. Yesvantpur - Jaipur AC Express (Weekly) via Gulbarga, Pune, Vasai Road ix. Ahmedabad – Delhi Sarai Rohilla Express (Tri-weekly) via Palanpur, Ajmer, Rewari x. Bandra – Amritsar Express (Weekly) Via Kota, New Delhi, Ambala xi. Bandra (T) – Katra Express (Weekly) via Kota, New Delhi, Ambala xii. Gorakhpur – New Delhi Express (Bi-weekly) via Lucknow, Moradabad xiii. Katra – Howrah Express (Weekly) Express via Mughalsarai, Varanasi, Saharanpur xiv. Mumbai – Gorakhpur Express ( Bi-weekly) via Khandwa, Jhansi, Kanpur xv. Patna– Bangalore Express (Weekly) via Mughalsarai, Chheoki, Manikpur, Nagpur xvi. Yesvantpur – Katra Express (Weekly) via Gulbarga, Kacheguda, Nagpur, New Delhi xvii. Thiruvananthpuram – Bangalore (Yesvantpur) Express (Bi- weekly) via Erode, Tirupattur

50. Express Trains : i. Ahmedabad – Katra Express (Weekly) via Palanpur, Jaipur, Rewari, Hisar, Bathinda, Amritsar ii. Ahmedabad – Lucknow Jn Express (Weekly) via Palanpur, Jaipur, Bandikui, Mathura, Kasganj

iii. Ahmedabad – Allahabad Express (Weekly) via Jalgaon, Khandwa, Itarsi, Satna, Manikpur iv. Amritsar – Gorakhpur Express (Weekly) via Saharanpur, Moradabad, Sitapur Cantt.

v. Aurangabad – Renigunta Express (Weekly) via Parbhani, Bidar, Vikarabad vi. Bangalore – Chennai Express (Daily) via Bangarpet, Jolarpettai vii. Bandra (T) – Lucknow Jn Express (Weekly) via Kota, Mathura, Kasganj viii. Bareilly – Bhopal Express (Weekly) via Chandausi, Aligarh, Tundla, Agra

ix. Bhavnagar – Bandra Express (Weekly) via Ahmedabad x. Bhavnagar- Delhi Sarai Rohilla Link Express (Weekly)

xi. Gandhidham – Puri Express (Weekly) xii. Gorakhpur – Pune Express (Weekly) via Lucknow, Kanpur, Bina, Manmad

xiii. Guntur-Kacheguda Double Decker Express (Bi-weekly);

xiv. Howrah – Yeswantpur AC Express (Weekly)via Bhubaneswar, Gudur, Katpadi xv. Hubli – Mumbai Express (weekly) via Bijapur, Sholapur xvi. Hyderabad – Gulbarga Intercity (Daily)

xvii. Jaipur – Chandigarh Intercity (Daily) via Jhajjar;

xviii. Kacheguda – Tirupati Double Decker Express (Bi Weekly); xix. Kota – Jammu Tawi Express (Weekly) via New Delhi, Ambala

xx. Kanpur – Bandra (T) Express (Weekly) via Kasganj, Mathura, Kota xxi. Lucknow – Kathgodam Express (Tri-weekly) xxii. Manduadih – Jabalpur Express (Weekly) via Allahabad, Manikpur, Satna

xxiii. Malda Town – Anand Vihar Express (Weekly) via Amethi & Rae Bareli; xxiv. Mannargudi – Jodhpur Express (Weekly) via, Jaipur

xxv. Mumbai – Chennai Express (Weekly) via Pune, Gulbarga, Wadi xxvi. Mumbai – Gorakhpur Express (Weekly) via Gonda, Balrampur, Barhani (after gauge conversion);

xxvii. Mumbai – Karmali AC Express (Weekly) via Roha xxviii. Nanded – Aurangabad Express (Weekly) via Purna, Parbhani xxix. Nagpur – Rewa Express (Weekly) via Satna

xxx. Nagercoil – Kacheguda Express (Weekly) via Karur, Namakkal, Salem xxxi. Pune – Lucknow Express (Weekly) via Khandwa, Bhopal, Bina, Jhansi, Kanpur xxxii. Ramnagar – Chandigarh Express (Weekly) via Moradabad, Saharanpur xxxiii. Ranchi – New Jalpaiguri Express (Weekly) via Jhajha, Katihar xxxiv. Secunderabad – Visakhapatnam AC Express (Weekly) via Kazipeth, Vijaywada xxxv. Santragachi – Anandvihar Express (Weekly) xxxvi. Srigangnagar – Jammu Tawi Express (Weekly) via Abohar, Bathinda, Dhuri xxxvii. Thiruvananathapuram-Nizamuddin Express (Bi-weekly) one day via Kottayam and one day via Allepey xxxviii. Varanasi – Mysore Express (Bi-weekly) via Wadi, Daund Passenger trains :

i. Bina – Katni Passenger (Daily) ii. Dekargaon – Naharlagun Passenger (Daily) after completion of new line iii. Gunupur - Visakhapatnam Passenger (Daily) iv. Hubli - Belgaum Fast Passenger (Daily) v. Jaipur – Phulera Passenger (Daily) 15

vi. Mannargudi – Mayiladuthurai Passenger (Daily) vii. Punalur – Kanniyakumari Passenger (Daily) via Kollam, Thiruvananthapuram viii. Sambalpur – Bhawanipatna Passenger (Daily)

ix. Tatanagar – Chakulia Passenger (Daily) x. Tiruchendur – Tirunelveli Passenger (Daily)

51. MEMU Trains : i. Anand – Dakor (Daily 2 services) ii. Anuppur-Ambikapur (6 days a week) iii. Delhi – Rohtak Passenger (Daily 2 services)

iv. Santragachi – Jhargram (5 days a week)

52. DEMU Trains : i. Morbi – Maliya Miyana ii. Ratlam – Fatehabad Chandrawati Ganj (Daily) after gauge conversion iii. Rewari – Rohtak (Daily)

53. Extension of Trains i. 14705/14706 Delhi Sarai Rohilla – Sujangarh Express to Jodhpur

ii. 15281/15282 Patna – Saharsa Express to Murliganj iii. 15013 / 15014 Kathgodam – Bhagat Ki Kothi Ranikhet Express to Jaisalmer

54. Increase in Frequency: i. 16571/16572 Bidar – Yesvantpur Express 3 days to daily ii. 17225/17226 Hubli – Vijayawada Express from 3 days to daily iii. 17319/17320 Hubli – Secunderabad Express from 3 days to daily Surveys

55. A large number of requests have been received from honourable Members, State Governments and other dignitaries for undertaking railway projects in their areas. The planning process of the railways requires a proper survey to ascertain the need for and viability of the project before it can be sanctioned.

56. On the basis of requests received from the hon’ble members, state governments and others, following surveys are proposed to be taken up in 201415:

New Lines :

i. Tiptur – Dudda ii. Nimach – Singoli - Kota iii. Dahod – Modasa 16

iv. Karad – Kadegaon – Lenare – Kharsundi – Attapadi – Diganchi – Mahud - Pandharpur v. Etah – Aligarh vi. Karnal – Yamuna Nagar via Asandih vii. Extension of Tindivanam – Nagari new line up to Puducherry viii. Challekere – Hiriyur – Huliyur – Chikkanayakanahalli – KB Cross – Turuvekere - Channarayanpatna ix. Betul – Chandur Bazar - Amravati x. Chakia – Kesariya (Kaithwalia) xi. Miraj – Kavathemahankal – Jath - Bijapur xii. Pune – Baramati via Saswad, Jejuri, Moregaon xiii. Etawah – Auraiya – Bhognipur – Ghatampur – Jahanabad – Bakewar – Bindki Road xiv. Haldaur – Dhampur xv. Belgaum – Hubli via Kitturu xvi. Pune – Ahmednagar via Kegdaon Kasti xvii. Bellary – Lingasugur via Siruguppa, Sindhanur xviii. Ghatanandur – Shrigonda Road / Daund via Kaij, Manjarsumbha, Patoda and Jamkhed xix. Birari – Mahatoni – Marwara – Mandanpur – Dhamoni - Sagar Doubling

57. Following surveys for doubling are proposed to be taken up in 2014-15:-i. Latur Road – Kurduwadi ii. Pune – Kolhapur iii. Allahabad – Pratapgarh iv. Salem – Omalur v. Prabhani – Parli

58. The task on hand is difficult and challenges are big. Yet we are determined to march on and take this magnificent organisation to even greater heights. This would require continued efforts of all members of Rail Pariwar and cooperation of all segments of society and the Government.

59. Madam, as I come to the end of my speech, valuable words of Pt. Jawahar Lal Nahru come to my mind. “A great national and state-owned organisation, like the Railways, is not only an asset of importance but is also a great responsibility. It can only be run with the fullest cooperation of all those engaged in it, keeping in view always the good of the public as well as the good of those engaged in serving the public through this vast organisation.”

60. With these words, Madam, I commend the Interim Railway Budget for 2014-15 to the august House