After the Balasore train accident exposed serious flaws in safety systems, the ministry of railways has removed a major administrative barrier in the implementation of works in critical safety areas like Kavach, signalling, and interlocking. These safety works would no longer require economic justification by the Railway Board for financial approval.
Kavach anti-collision system, electronic, panel, and relay room interlocking, block signalling, centralised traffic control, and technology upgradation will now be covered under the “safety exemption” to the financial rules of the Centre, an order by the railway board dated June 22 said. Business Standard has reviewed a copy of the order.
“Certain projects would end up getting stuck at the level of the railway board, or the finance ministry or cabinet due to improper calculation on the rate of return (RoR), which may have been delaying some projects,” a senior government official said.
So far, these works were to be processed through a “test of remunerativeness”. Under this test, “no proposal for fresh investment will be considered as financially justified unless it can be shown that the net gain expected to be realised as a result of the proposed outlay would after meeting the working expenses or average annual cost of service yield a return of not less than 10 percent.”
Prima facie, interference with the interlocking system is being seen as the root cause of the Balasore accident that killed nearly 300 and injured about 1,000 people. A Comptroller and Auditor General (CAG) report from 2022 also pointed out to the lack of essential signalling and interlocking infrastructure despite higher funds being allocated to the ministry.
Notably, the ministry’s contributions to the Rashtriya Rail Sanraksha Kosh, a special fund created to focus on railway safety, were found to be inadequate by the CAG in its report, even though the fund was created for the sole purpose of expediting execution of safety works.
“RoR is a thing of the past now. Today, the government wants to pour money on infrastructure, but the issue is the inability of Railways to absorb (the capex),” Lalit Chandra Trivedi, former general manager in Indian Railways said.
The root cause of the problem remains in balancing the upgradation in safety infrastructure with the ever-growing pressure to run more trains, according to Trivedi. “Executives in charge of safety or other work need traffic blocks. Simultaneously executives in charge of operations are under pressure to run more trains to achieve loading targets. These requirements are contrary to each other and are the root cause for slow progress of works like Kavach, etc,” he said.
Meanwhile, the ministry also clarified that the scope of the order does not extend to actual revenue generating projects. “It is further clarified that signalling and telecom assets, which are not required for train operations and are being created for monetiatison, shall require the test of remunerative ability,” the railway board order said.
