“Rate of return is an important criterion for sanction of projects” said Adhir Ranjan Chowdhury, Minister of State of Ministry Of Railways while replying to a query relating to his Ministry in the Parliament recently. But the statistics provided by his Ministry suggest a different story. More than 50% of the recently sanctioned New Line projects have negative rate of return. Some projects have negative rate of return of more than 20%. Remember, rate of return is calculated based on projected date of completion and this is likely to go up further when projects actually get completed and start operating as most of the Railway projects never get completed on time.

Railway projects which highest negative rate of return
Project
Length in km
Rate of return (%)
Hansdiha-Godda
30
-38
Chola-Bulandshahar
16
-22
Gudur-Durgarajapatnam
41.55
-12.72
Hasnabad-Hinalganj
14
-12
Yamuna Nagar-Chandigarh
145
-11.82
Kaliyaganj-Buniadpur
33.13
-10.50
Pirpainti-Jasidih
127
-10
Balurghat-Hilli
29
-9.13
Ferozpur-Patti
25
-8.67
Byrnihat-Shillong
108.40
-8.34

During the last three years and the current year i.e. 2010-11, 2011-12, 2012-13 & 2013-14, 54 New Line projects were sanctioned. Of this, 28 have negative rate of return. According to the Railway Ministry officials, New Line Railway projects are also taken up on socio-economic considerations for development of economically backward areas. So, sooner or later Indian Railways may also follow the footsteps of Air India.


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