The Railway Ministry’s move to put on hold the process of setting up 100 budget hotels near railway stations, citing a conflict of interest with its plan to develop world-class stations, has drawn flak from the Parliamentary Committee on Public Enterprises.In its latest report, tabled in both Houses of Parliament on Wednesday, the Committee has expressed distress at the conflict created due to the Government’s “new concept of developing world class stations” on sites identified by the Indian Railways Catering and Tourism Corporation (IRCTC), slowing down the project and subsequently leading to clearance for only 21 out of the proposed 29 sites in the first lot.Having decided to set up 100 “Rail Ratna” brand of budget hotels near railway stations for tourists and rail users, the ministry had authorised IRCTC to develop them on public private partnership mode in 2006. After identifying 100 locations, IRCTC simultaneously initiated the tendering process for 29 sites and sought the ministry’s clearance to get the land allotted.However, the ministry put on hold the process of handing over sites for these 29 hotels stating that it was considering the modalities for giving land to it’s PSUs and authorities and was “reviewing the proposed sites with a view to develop world class stations”. After months of delay, the ministry finally cleared 21 sites, leaving out eight sites for development of stations.The committee has minced no words in stating that the “sudden introduction” of Government’s “new concept of developing world class stations on IRCTC’s identified sites delayed the process of clearing the sites to set up budget hotels by almost one year” and “created a conflict” between the process of developing budget hotels and world class stations at the proposed sites.Seeking expeditious resolution of the conflict, the Committee has recommended that the ministry first undertake a review of all the remaining sites identified by IRCTC in a bid to ensure that no delay occurs in finalising sites for budget hotels.Panel wants haulage charge withdrawnThe Parliamentary Committee on Public Enterprises has criticised the Railway Ministry for capping the gross profit of IRCTC at Rs 30 crore annually by levying a haulage charge on its pantry cars. During 2006-07, the ministry capped the IRCTC’s gross profit by directing that the corporation will have to bear the full marginal cost of haulage of pantry car and all surplus earnings over Rs 30 crore will have to be paid as haulage charges. The ministry justified its decision saying it had incurred losses worth Rs 494.46 crore on catering service in 2005-06 alone and a sizeable portion of these losses was on account of haulage charges of pantry cars. Stating that the haulage cost for pantry cars levied on IRCTC adds at least 10 per cent to the overhead cost, the Committee has said that the move would affect quality of food and services on mobile units “unless the tariffs are suitably raised”. The Committee has recommended the withdrawal of this haulage charge so that IRCTC “is not forced to transfer this cost to the passengers using the catering service”.
