The railways aims to improve the operating ratio to 88.5 per cent during the next fiscal, the best in the last nine years, Railway Minister Suresh Prabhu said on Thursday.The operating ratio, a key measure of efficiency, was at 91.8 per cent in 2014-15 after touching a high of 93.6 per cent in the previous financial year. The lower the operating ratio, the better is the profitability of an entity.
To get the most out of additional resources that will be invested, he said the ministry will need to ensure the highest standards of operational and business efficiency. “I propose the operating ratio for 2015-16 at 88.5 per cent as against a targeted operating ratio of 91.8 per cent in 2014-15 and 93.6 per cent in 2013-14.
“I am pleased to state that not only will this be the best operating ratio in the last nine years but the best after the VIth Pay Commission,” he said. Prabhu added that the railways will not be able to deliver sustained improvement in operating efficiency unless changes are made to speed up decision making, tighten accountability, and improve management information systems.
“For our transformation journey to succeed, it will be very important to harness the talent of our employees through training and development,” he said. Further, he said the total receipts of railways have been revised to Rs 1,63,450.13 crore in 2014-15 and was proposed at Rs1,88,556.70 crore for 2015-16.
Railways to mobilise Rs17,655 cr from borrowing in 2015-16
Indian Railways will borrow Rs17,655 crore from markets through its two companies IRFC and Rail Vikas Nigam ltd for capital expenditure during 2015-16, a nearly 47 per cent increase over the current fiscal year’s revised estimate.
The market borrowing as per the revised estimate by these two companies during the current fiscal was pegged at Rs12,045 crore from markets, according to the Railway Budget for 2015-16, which was tabled by Railway Minister Suresh Prabhu in Parliament on Thursday.
Indian Railways Finance Corporation (IRFC) will raise Rs17,276 crore in 2015-16 for investment in rolling stock, the Railway Budget document said. Besides, the other financial firm under Indian Railway Rail Vikas Nigam ltd (RVNl) plans to raise Rs379 crore through market borrowing.
During 2014-15, IRFC raised Rs11,772.60 crore while RVNl mopped up Rs273 crore from the market as per the revised estimate. “For financing remunerative projects through market borrowings, it is intended to tap low-cost long-term funds from insurance and pension funds, multi-lateral and bilateral agencies which can be serviced through incremental revenues,” Prabhu said in his proposals while presenting the Rail Budget. Railways will create new vehicles to crowd in investment from long-term institutional investors and other partners, he said.
“These may include setting up an infrastructure fund, a holding company and a JV with an existing NBFC of a PSU with IRFC, for raising long-term debt from domestic as well as overseas sources, including multilateral and bilateral financial institutions that have expressed keen interest in working closely with Railways in this endeavour,” he said.