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Rail Development Authority

Rail Development Authority (RDA)

Bhubaneswar, 05.04.2017: Setting up of RDA is one of the biggest reform in the rail sector. The move of the Government will improve the services offered to  passengers, provide comfort to investors in Rail sector and will enhance transparency and accountability. The need of having a Rail Regulator has been emphasized by various Committees for past many years since 2001.  This includes Expert Group under the Chairmanship of Dr. Rakesh Mohan in 2001, the National  Transport Development Policy Committee (NTDPC) in 2014 and Dr. Bibek  Debroy’s Committee in 2015.In the Railway Budget 2015-16, Minister for Railways had announced  that for the purpose of orderly development of infrastructure enabling  competition and protection of customer interest, it is important to have a regulation mechanism independent of the service provider.  Further, it was proposed to set up a mechanism for making regulations,  setting performance standards and determining tariff.As a demonstration of true participative governance, Ministry of  Railways had prepared a Concept Paper of rail regulator named Rail  Development Authority of India (RDA) in December 2015 and sought comments from all industry and passenger bodies. It was also put on Indian Railways website for comments from general public. The comments  received were analyzed and subsequently Cabinet Note was finalised after inter ministerial consultation. Cabinet’s approval of proposal of Ministry of Railways for setting up  a Rail Development Authority (RDA) as an independent regulatory body in New Delhi through an Executive Order of the Central Government  represents one of the biggest policy reform in Railway sector. RDA will help Government to take appropriate decisions on pricing of  services commensurate with costs, suggest measures for enhancement of  non-fare revenue, protection of consumer interests, promote competition, encourage market development, create positive environment for investment, promote efficient resource allocation, benchmarking of  service standards, suggest measures for absorption of new technologies and human resource development and provide framework for non-discriminatory open access to the Dedicated Freight Corridor  infrastructure.The RDA will act within the parameters of the Railway Act, 1989 and undertake the following broad functions:
•       Tariff determination – Framing principles, recommendations of tariff setting, principles for classification of commodities, framing principles for social service obligation and guidelines for track access charge.
•       Ensuring fair play and level playing field for stakeholder investment in Railways – Propose modifications and send suggestions/Advisory Notes on reference made by Ministry of Railways,
make suggestions regarding policies for private investment, to ensure reasonable safeguards to PPP investors and to resolve dispute regarding future Concession Agreements.
•       Setting efficiency and performance standards.
•       Dissemination of information – Global best practices and benchmarking.
The Authority will have a Chairman and 3 Members and can engage  experts from relevant areas.  The Chairman and the Members of RDA will have term of five years.   An initial corpus of Rs.50 (fifty) crores will be provided for setting up the organization. The RDA will be an independent body with separate budget. The independence is ensured through separate budget, appointment and
removal process. The appointment of the Chairman and Members will be done by the Central Government from the panel of names recommended by the Search and Selection Committee consisting of Cabinet Secretary as  Chairman, Chairman Railway Board, Secretary, Department of Personnel & Training, and Chairman of any Regulatory Body of Central Government nominated by Cabinet Secretary. The Chairman and Members will have tenure of five years and can be removed by the Central Government on certain grounds like  insolvency,  conviction,misbehaviour, physical and mental incapability  etc

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