Indian Railways to charge AC Class passengers a user development fee

New Delhi: Railway passengers may have to pay a user development fee, along the lines of the levy charged by airport operators on travellers, to fund the upgrade of railway stations, if a proposal that is currently being drafted is accepted.

Indian Railways proposes to charge a fee of as much as Rs10 on air-conditioned (AC) and chair car tickets that cost more than Rs500 per trip to give people at railway stations the kind of facilities that are available at airports, two officials said on condition of anonymity.

The proposal will exclude a majority of railway travellers, as a very small percentage of people travel in AC compartments. The fee will help Indian Railways generate funds to upgrade and maintain railway stations.

“We plan to charge a small amount between Rs5 and Rs10 on AC class and chair car tickets and those which cost above Rs500. As stations are introducing facilities like escalators and beautifying railway stations, we would need money to maintain them,” said a government official, one of the two people cited above.

The official said no decision has been taken yet on the proposal. Queries emailed to the railway ministry remained unanswered till press time.

As part of the government’s $1 trillion station redevelopment programme, the government plans to make stations more attractive and passenger-friendly by building escalators, lifts and shopping complexes.

Last year, the government announced it would modernize 400 railway stations across the country. The target was later increased to 600.

The proposal comes even as Indian Railways has failed to appoint the Rail Development Authority more than a year after the cabinet cleared it. In April 2017, the Union cabinet had approved the setting up of the authority, a regulator for the railways. The regulator was supposed to perform four primary functions—tariff determination, ensuring fair play and a level playing field for stakeholder investments, setting efficiency and performance standards and dissemination of information.

“Revision of railway tariffs is not possible till the authority comes into place. Amid this crisis, introduction of user development fees is a viable option,” said a railway official, the second person cited above.

Rail passengers have expressed their willingness to pay more, provided they get cleanliness and efficient service, according to studies conducted by the Railways through consultancy firms.

The Railways, which depends heavily on freight revenue to subsidize passenger fares, was allocated a record Rs1.48 trillion in the Union budget to raise its carrying capacity and improve the experience of travelling by train.

Experts termed the proposal, an indirect way to raise fare revenue in the wake of past political opposition to upfront hikes, “smart ”.

Jagannarayan Padmanabhan, director and practice leader, transport and logistics, CRISIL Infrastructure Advisory, said this was a welcome move by the Railways that would enable it to provide better facilities at the station.