Railway Minister Nitish Kumar has said he was satisfied with the financial performance turned in by the department in this fiscal.

The operating ratio would improve over the Budget target of 94.4 per cent, he added.

Speaking to reporters, Nitish said the improvement in the ratio, which measured the ability of the Railways to pay for their expenditure from the current revenues, indicated that the railway finances were looking up. It was 96.6 per cent in the previous fiscal.

The minister said he had already apprised the prime pinister about the salient points of the Rail Budget.

He also said the ministry had also completed discussions with the Planning Commission about the size of the Plan support.

While the minister refused to divulge any figures, the Plan support had been finalised at Rs 12,500 crore (Rs 125 billion) for 2003-04.

Official sources said the Railways were likely to raise passenger fares by more than 5 per cent, while freight rates in most categories would have to be raised to account for the impact of inflation of around 4 per cent.

But officials discounted the impact of the diesel price rise on freight charges, saying the same had come quite late in the fiscal and the impact was not as direct as was being made out.

However, Nitish Kumar would possibly spare the suburban commuters this year after hiking the rates steeply in the previous Budget.

The Railways are projected to end the fiscal with an uncovered deficit of about Rs 1,000 crore (Rs 10 billion).

It is expected to earn Rs 15 crore (Rs 150 million) from commercial utilisation of land, and a similar amount from the ongoing Railtel project.

According to estimates, the Railways would end the year having carried more than the budgeted 510 million tonnes of freight. It is expected to cross the target for passengers also.

Kumar said the ministry would come out with a white paper on the safety aspects of railways in the Budget session. He said as per present indications the rail Budget would be tabled on February 24.

The ministry has signed a memorandum of understanding with the petroleum ministry to launch bio diesel in railways.

The pilot project envisages harvesting seeds from Ratan Jyoth trees to blend with diesel up to 5 per cent and later 10 per cent. Speaking on the occasion, Petroleum Minister Ram Naik said the project could substantially reduce the crude import bill.

Of the total 40 million metric tonnes of diesel used in the country annually, the Railways use about 5 per cent. He added the project would be a collaboration of the Railways with the Indian Oil Corporation.

The Railways have already conducted fuel trials on the New Delhi-Amritsar Shatabdi Express.