Plan panel wants Rail Tribunal to fix passenger fares

New Delhi: In a move that would dilute the authority of Railways to fix passenger fares, a Planning Commission group has suggested giving the powers to decide tariffs to the Railways Rate Tribunal (RET), a quasi-judicial body which adjudicates freight disputes.

"The scope of Railway Rates Tribunal can be expanded to cover passenger fares and parcel tariff also," said a report of the working group which was set up by Planning Commission to suggest steps to strengthen the Railways.

The suggestion is significant as the government has not taken any decision on setting up an independent body to fix passenger fares despite suggestions by several committees.

Even the efforts of former Railway Minister Dinesh Trivedi to set up a Rail Tariff Regulatory Authority to fix passenger tariff in his Rail Budget for 2012-13 was aborted after his successor Mukul Roy put the proposal in abeyance.

It has been argued that an independent authority is necessary to fix passenger fares as Railway Ministers often refrain from raising tariffs due to political reasons.

The passenger fares were increased in higher classes in the 2012-13 budget after a gap of nine years. Roy rolled back the proposed hike in fares in general, sleeper class and three-tier air-conditioned class after objections were raised by Trinamool supremo Mamata Banerjee.

In the process, railways had to forego about Rs 3,700 crore in fares following the rollback. Under the provision of Railway Act, 1989, fixation of freight and fares is the prerogative of Ministry of Railways and the RRT can be approached for relief in respect of freight tariff disputes.

The Planning Commission working group has also suggested opening of more regional branches of the tribunal. At present the tribunal has only one bench at Chennai.

In the present legal framework, the passenger fares are outside the jurisdiction of tribunal.

The report stressed that, "with entry of multiple players through the PPP route, dispute resolution would assume urgency. The role of Ministry of Railways as licensor, regulator and a key player may not be conducive for attracting sizeable private investment into railways".

The group has observed that the PPP project have not taken off well in the rail sector and a lot needs to be done for attracting private investment. It also suggested that an independent regulatory authority to fix tariff and deal with matters relating to tariff affecting PPP players would be needed.

A Dispute Settlement Tribunal for PPP contracts of Ministry would also greatly help in imparting credibility and predictability to the process which can be done after appropriate changes in the Railway Act, it added.

These measure, the group said, "would help in expansion of the PPP programme of Railways."