Railways to have independent mechanism to fix fares

New Delhi: Railways is planning to set up an independent institutional mechanism for deciding passenger fares and freight tariff based on efficiency.

"We will have an institutional mechanism which will take into account the efficiency to decide passenger fare and freight rate," Railway Minister Suresh Prabhu said.

Asked whether it will be called Rail Tariff Authority, Prabhu said, "Nomenclature has not been decided yet but it will be a new mechanism altogether in Railways." He further said that there will be a new law enacted by Parliament for the purpose.

"We will consult with Opposition on this and we will create a new law," Prabhu said.

On energy efficiency, the Minister said Railways is taking initiatives to save Rs 5,000 crore on energy bill in the next three years.

"Energy bill is the second biggest challenge for Railways. We are taking various measures to reduce energy bill like going for solar power, wind energy and other energy conservation measures," he said.

Currently Railways spend about Rs 22,000 crore on diesel and about Rs 13,000 crore on electricity. On bullet train project, he said the JICA report on Mumbai-Ahmedabad high speed rail corridor project is being evaluated by the government to decide the future course of action on India's first bullet train.

"The Japan International Cooperation Agency (JICA) has done a feasibility study on Mumbai-Ahmedabad high speed rail corridor. The government is evaluating it and accordingly a decision will be taken," he said.

Besides Railways, Finance Ministry, MEA and Niti Ayog are evaluating the report, he said, adding that such a project of this magnitude is happening for first time in India.

India's maiden bullet train corridor between Mumbai and Ahmedabad will cost nearly Rs 1 lakh crore and the first train can run in 2024 if work begins in 2017, according to a final feasibility report on the project prepared by the JICA.

JICA in its report submitted to the Railway Ministy on Wednesday envisages a reduction in the travel time on the 505-km long corridor between the two western cities to two hours from the existing over seven hours.