NEW DELHI, July 12: The Konkan Railway is making a loss of over Rs one crore every day, forcing the Railways to consider if slashing the higher fare and freight rates on the new line would help.Though the line was not expected to bring in profits in the first few years, Railway sources say that the returns are even more sluggish than anticipated.The 760-km route, open since January-end but `dedicated' to the nation by Prime Minister Atal Behari Vajpayee only on May 1, generates a revenue of around Rs 90 lakh a day from passenger fares and freight charges. According to one estimate, after recovering the operating costs, the Konkan Railway Corporation (KRC) has to shell out Rs 1,000 crore over the next three years to repay its loans.A big chunk of the Rs 3,500 crore investment on the mega rail project has come through borrowings from the market. Under the unique financing plan, the Railway is jointly owned by Indian Railways and the four States which benefit from the new line Maharashtra, Karnataka,Goa and Kerala.Unlike other sections on the Indian rail network, KRC has a high degree of autonomy. But Indian Railway holds more than half of the Rs 800 crore equity, and the Railway Board chairman is also the Konkan Railway chairman. After 10 years, Indian Railways have the option of merging KRC with its network.About a fortnight ago Corporation officials headed by Managing Director B Rajaram made a presentation at the Rail Bhawan, seeking support from the `parent' outfit. The KRC officials want more trains diverted onto the new line, to improve its financial viability. At present, 12 pairs of passengers trains and eight freight trains run on the line.Sources maintain there is some reluctance in Rail Bhawan in ``losing business'' to the subsidiary.Railway Minister Nitish Kumar has however directed the formation of a committee, including Railway Board's Member (Traffic) and General Managers of Southern Railway and Central Railway to discuss how much traffic can be diverted from the two zones tothe new line.Nitish Kumar has suggested that the Konkan Railway ``rationalise'' its tariff structure, it is learnt. Though a Konkan rail journey substantially slashes distance and time, the passengers pay a 40 per cent surcharge over normal rail tariff calculated by the kilometre. Surcharge on freight is a massive 50 per cent.The aim is to help Konkan Railway recover its investment but some officials feel the steep fares and freight charges are deterring both passenger and freight traffic from the new route.Konkan Railway took seven years in the making and is the longest rail line laid in the country after the British left. Apart from the challenge of financing the massive project, it was also a test of Railways' technical expertise.The line passes through a difficult though picturesque terrain. There are 169 major bridges, 1630 minor ones, and 88 tunnels - one of them 6.5 km long. If it takes off as planned, the Railway is expected to boost the economy of the entire Konkan Railways. And wouldsave costs by offering an alternative and much shorter North-South rail route. For example, it reduces the Mangalore-Delhi distance by 785 kms. The Mumbai to Mangalore journey will be shorter by 900 kms.
