Despite red flags, Lalu gets his Bihar Rail Budget cleared

If Railway Minister Lalu Prasad Yadav has his way, his home state Bihar is set to bag almost 45 percent of the “New Line” railway...

If Railway Minister Lalu Prasad Yadav has his way, his home state Bihar is set to bag almost 45 percent of the “New Line” railway projects likely to be announced in this year’s Rail Budget.

Sources have told The Indian Express that “at least 10 of the 25-odd new line railway projects” Lalu is likely to read out from his Budget Speech on February 26 are located in Bihar. These projects in Bihar amount to Rs 4,000 crore.

The new lines include (see map): Sitamarhi-Jaynagar-Nirmali via Susand, Muzaffarpur-Katra-Orai-Janakpur Road, Gaya to Daltonganj and Darbhanga-Muzaffarpur.

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Almost all these projects have a negative rate of return prompting the Finance Ministry and the Planning Commission to raise red flags. But Lalu got the decks cleared by getting them approved by the Cabinet Committee on Economic Affairs (CCEA) today.

Indian Railways have fixed a rate of return of 14 percent to decide the viability of a project. A project having a negative rate of return means that the operating losses would skyrocket as and when the project is completed. Already saddled with a crammed shelf of pending projects, Railways nowadays only consider projects having a minimum 14 percent rate of return.