Economy
How Railways can raise funds for its ambitious projects
Over the next five years, the Railways plan to invest in dedicated freight corridors, high-speed rails and elevated corridors, obtain rolling stock production and to develop logistic parks for facilitating Rail movement. All this requires an investment of about Rs8.5 lakh crore
 
Recently, while presenting the Railway budget, Minister Suresh Prabhu had indicated that, in the next five years, Railways hope to invest Rs8.5 lakh crore to cover various projects already identified by them.  They expect to generate surplus funds of Rs7,286.46 crore by the end of this month and project this to almost double to Rs14,265.71 crore by the next year.
 
However, the projects on hand alone would require over Rs2 lakh crore to complete, over the next few years.
 
It appears the Railway Minister has already some plans and has been discussing the prospects of getting some surplus funds from Life Insurance Corp of India (LIC), whose assets are said to exceed Rs20 lakh crore, and would probably be happy to invest Rs1 lakh crore in the Railway infrastructural projects.  As the world's fourth largest railway network in the world, there ought to be no problem in LIC coming to the aid of Indian Railways.
 
Over the next five years, it is reported, that the Railways plan to invest in dedicated freight corridors, high speed rails and elevated corridors, like in Mumbai, obtain rolling stock production and in development of logistic parks for facilitating Rail movement.
 
It may recalled that Minister Prabhu had also referred to the issue of coming out with Railway Tax Free Bonds to raise the needed funds as this will help in the railway development projects. Apart from huge daily passenger traffic, Railways carry millions of tonnes of raw materials like coal, iron ore and others to and from place of manufacture.  
 
Take for instance, the question of coal movement itself which has the biggest bottleneck of evacuating coal from pitheads to the point of consumption and this has been a perennial problem due to shortage of rakes. Imported coal is also lying in millions of tonnes at ports for the same reason and this gap is likely to widen, as the production of coal increases when the new owners of coal mines take control, after the auction process is complete. Therefore, a new approach is needed to check if this can be successful.
 
Since the wagon needs are standardised, why not avoid the usual practice of calling for tenders? Can this not be simplified by a rate contract like the Directorate General of Supplies and Disposals (DGS&D)? An estimate of annual needs can be advised to the wagon builders, and they can also plan their raw material needs so that unnecessary processing time for this tendering can be eliminated?
 
The second issue would be to invite the main buyers of coal, iron ore etc, to be able to "finance" the purchase of these wagons, under the same DGS&D contract, and make it available to miners of these minerals!  One can go one step further, and have these wagons duly identified as "belonging" to this or that company, but with individual colour identification. These rakes must have priority in movement.
 
The most important aspect is the urgent and imperative need to have a detailed study of the use of railway tracks and employment of a Coal Express by Coal India on these tracks. The tracks are not in use all the time, and without disturbance of other rail movement, all these cargo trains can have priority in movement.
 
In the meantime, the Parliament is already considering the declaration of rivers to be converted into "national waterways" and this will reduce the stress on Railways for the time being in those sectors that are used for coal or other raw material movement.
 
Finally, for special freight corridors, Railways can also seek funding from main users, so that these can be developed without further delays.  If exclusive corridors or tracks are required, why not the Railways permit the consumer (buyer) to "adopt" this as a project and meet its costs?
 
Minister Suresh Prabhu may have similar ideas to generate funds and one may expect some interesting announcements in the near future.  
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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Satyam Computers: Special Court to announce final verdict on 9th April

While ruling out further adjournments, the Special Court said it will proceed even if counsels of accused do not show up

 

A special court in Hyderabad trying the multi-crore accounting fraud in erstwhile Satyam Computer Services Ltd (SCSL) Monday said it will pronounce its judgement in the case on 9th April.
 
Citing voluminous documents in the case, Special Judge BVLN Chakravarthi said, "On April nine, the judgement will be pronounced. I am making it very clear."
 
"It is mandate of the Supreme Court that judgement has to be pronounced. If any obstruction is caused it is contempt of (apex) court...It is your (accused) duty to bring your advocates. Court will go ahead with its proceedings," he said.
 
The judge's observation came, as defence counsels were not present in the Court ostensibly because of the ongoing agitation of Telangana advocates, who have been boycotting courts demanding separate high court for the new state.
 
"April nine will be the final date for the verdict. No question of further adjournments. Court will not wait," the judge said.
 
During the last hearing on 23 December 2014, the court had said it would pronounce the verdict today.
 
On the possible reason for pushing further the judgement date again, Central Bureau of Investigation (CBI) counsel K Surender cited the voluminous documents of the case as well as the time needed for "typing the judgement."
 
Touted as the country's biggest accounting fraud, the scam had come to light on 7 January 2009, after the erstwhile company's founder and then Chairman B Ramalinga Raju allegedly confessed to manipulating his company's account books and inflating profits over many years to the tune of crores of rupees.
 
Raju was arrested by Andhra Pradesh Police's Crime Investigation Department (CID) two days later, after he allegedly confessed to the fraud, along with his brother Rama Raju and others.
 
All the 10 accused in the case, who are out on bail, were present in the court today.
 
Around 3,000 documents were marked and 226 witnesses examined during the trial that began nearly six years back.
 
Besides Ramalinga Raju, the other accused in the case are: his brother and Satyam's former Managing Director B Rama Raju, former Chief Financial Officer Vadlamani Srinivas, former PwC auditors Subramani Gopalakrishnan and T Srinivas, Raju's brother B Suryanarayana Raju, former employees G Ramakrishna, D Venkatpathi Raju and Ch Srisailam and Satyam's former internal chief auditor VS Prabhakar Gupta.
 

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Bombay High Court asks Central Bank of India to file affidavit in a PIL filed by Sawant

Sawant, a popular union leader from Central Bank of India, has raised in his PIL the issue of bulging NPAs of state-run banks and lack of action by the lenders as well as government and regulators

 

The Bombay High Court, while admitting a plea by Subhash Sawant, a union leader from Central Bank of India, has asked the Bank to file an affidavit within two weeks. Sawant had filed a public interest litigation (PIL) against, the Union government, Ministry of Finance, Reserve Bank of India (RBI), Central Vigilance Commission (CVC), the Bank, Central Bank Employees Federation and Indian Banks' Association (IBA).
 
Sawant, the General Secretary, of Central Bank Employees Union, has been actively raising his voice against the rising non-performing assets (NPAs) in public sector banks (PSBs) and its inept handling by the bank officials for many years. His relentless battle in the past exposed the dubious dealings of the Bank's former chairperson Homai Daruwala.
 
Earlier, in May 2014, the All India Bank Employees Association and in July 2014, the Bank Employees Federation of India issued releases containing names of several clienteles of public sector banks who have defaulted in repayment of the loans running into thousands of crores of rupees.
 
Subsequently, in October 2014, Sawant issued a press note detailing names of various borrowers of Central Bank of India who have defaulted in repayment worth thousands of crores of rupees.
 
Sawant retired from the Bank in 2009 but continues to be agitated about the impact of rising bad loans. He has been creating awareness among the public about how funds are being doled out to chosen industrialists. 
 
On 3rd November, the Bank issued him a notice for failing to maintain good conduct as a retired employee and providing ‘misleading information’ to the media about bad loans and their recovery. If the action is taken to its logical conclusion, Sawant’s pension and benefits from the Bank would be affected.
 
Sawant, however, stated in the petition that he issue he is raising is about NPAs of state-run banks and lack of action by the lenders as well as government and regulators. He clarified that personal issues with the Bank should not be clubbed with the PIL and he will take appropriate steps in his personal capacity. 
 
Central Bank of India, has had many controversial chairpersons, including Daruwala, who only got a ‘letter of displeasure’; but it is attempting to silence a bold union leader by threatening his pension. In order to understand why the Bank wants to silence Sawant, take a look at the massive bad loans that he has been drawing attention to. 
 
Just 16 corporate groups account for bad loans of Rs4,255 crore in Central Bank of India. Of these, one particular loan is probably making the Bank’s senior management very jumpy—it is the outstanding of Rs316 crore to Sujana Towers, a company belonging to the recently inducted minister, YS Chowdary, of the Telugu Desam Party (TDP). The Bank claims that Sujana Towers is not an NPA when it is. The table reads like a list of the more outrageous rip-offs of Indian banking by corporate India. It includes the notorious Winsome Diamonds and Forever Diamonds. Three companies belong to the S Kumar group whose promoters continue to be rich, while they owe big money to lenders. Then there is Kingfisher Airlines with dues of Rs365 crore, the Housing Development and Infrastructure Ltd and others. 
 
As a consequence of the support lent by Bank insiders to the whistleblower, the charges against Ms Daruwala were proved. The Bank spent Rs70 lakh in defending her through the politically-connected Abhishek Manu Singhvi (he was paid Rs50 lakh in fees). 
 
In December 2014, Sawant filed a PIL seeking the Bombay High Court’s ‘interference and directions’ for effective loan recoveries in PSBs and ordering them to recover the loans that their clients have defaulted on. 
 
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COMMENTS

P b Sarma

2 years ago

All big ticket NPAs are nothing but siphoning off public deposits into unviable projects of politicians and keeping quiet.Govt does not want to recover these loans with stiff measures but wants to penalise staff by giving less salaries and levy higher service charges on innocent public.

Veeresh Malik

2 years ago

Good job by Mr. Sawant. As a constituent member of Central Bank of India with a bank account with them for 48 years now (since 1967 with the same branch) I would like to join Mr. Sawant as co-petitioner if possible.

Vaibhav Dhoka

2 years ago

All petty are small account holders should support Mr Sawant in his PIL about NPA. This.This rise in NPA will give rise to increased service charges by members of IBA followed by non members.

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