No tariff regulator: Rly plea to Cabinet

The Cabinet had decided to set up the RTRA in August last, with the aim of rationalising rail tariff. But the ministry — vacillating over the issue — had so far failed to constitute the regulatory body. And now the Railways hope the Cabinet will heed to their argument and rescind its earlier decision. Confirming the Railway Board’s decision to go back to the Cabinet, Chairman R.K. Singh said RTRA was a ‘‘difficult decision to implement’’.

The Cabinet decision was based on the recommendation of the Approach Paper for the Tenth Plan, which had analysed that the root cause of financial problems confronting the Railways was cross-subsidisation at the expense of freight services.

‘‘Cross-subsidisation of passenger fares by freight revenues as also subsidisation within the passenger and freight segment, and operation of certain uneconomic services caused an annual loss of Rs 4,000 crore to the Railways,’’ the paper had said. Reluctant to give up their power, the Railway Ministry’s logic is that a regulatory authority is not required since the Railways have no competition.

The Railways have also argued there is no tariff regulator in the case of the Ministry of Road Transport and Highways, where the volume of traffic carried is higher than the Railways’. Moreover, they said since the fares fixed were approved by Parliament, there was no need for a regulator. But the fact remains that the Railways have not increased passenger fares for the last three years. They have continued to face a decline in the market share in the transport sector and the freight traffic.