The regulator, named Rail Development Authority (RDA), will be based in Delhi with an initial corpus of Rs. 50 crore and will be set up through an executive order later this month.
The RDA will act within the parameters of the Railway Act, 1989 and only make recommendations to the Ministry which will take a final call on passenger and freight fares.
Comfort to investors
“The move will improve the services offered to passengers, provide comfort to investors in the rail sector and will enhance transparency and accountability,” said an official statement.
The need for a regulator has been emphasised by various committees, including the
1. Dr. Bibek Debroy Committee on Mobilisation of Resources for Major Railway Projects and Restructuring of Railway Ministry in 2015,
2. National Transport Development Policy Committee (NTDPC) in 2014
3. Expert Group under the Chairmanship of Dr. Rakesh Mohan in 2001.
The Authority’s primary functions will be to recommend tariff “commensurate with costs,” frame principles for social service obligation, and ensure a level playing field for stakeholders by suggesting policies for private investment.
It will also fix efficiency standards and resolve disputes related to future concession agreements, the Ministry said. It will also collect, analyse and disseminate information and statistics concerning the rail sector.
“This is a commendable move as the Central government has been fixing the fares mostly based on political considerations,” said former Railway Board Chairman S.S. Khurana.
Source: The Hindu