NEW DELHI: Indian Railways is targeting a higher share of non-railway revenue in the next five years to augment tariff-based operations. Railways Minister Suresh Prabhu has asked SBI Cap, the investment banking arm of the State Bank of India, to draw up a plan that will lean heavily on asset monetisation and providing end-to-end solutions to customers.The other element of improving railway finances over the medium term is the creation of a holding company structure for the organisation that will allow the Railways to leverage its companies more for both raising resources and also keeping them within the organisation, Prabhu told ET. SBI Caps is in charge of this process as well.Prabhu, brimming with ideas to turn the railways around, promises a visible change in the next five years.The current year, however, is turning out to be difficult for Indian Railways because of the decline in the key business—the movement of resources. Meanwhile, the railways is facing a Rs 32,000-crore wage bill increase on account of the pay commission award."Our cost saving will be really high, so it may not be so bad this year. Next year, the full blow of pay commission will come… we are talking to the finance ministry," Prabhu said, before adding that over the longer term he was not worried, detailing a plan for investment and customers."The challenge is next five years—when your projects are not complete, costs have increased after pay commission. After that I don’t think there is any problem," the minister said. "First phase of the payoff from what the government is doing is five years."There is a growing realisation that the kind of investment the railways needs is not possible through a business-as-usual approach. "Long-term sustainable solution has to come by increasing non-railway revenues of the railways," Prabhu said, detailing these areas.The most significant emphasis is on utilising the potential of railway stations. The South Koreans are interested in station development, he said. SBI Caps will work out a detailed plan for monetising assets such as land, the optical fibre network, data, advertising and leveraging its units.At some stage, Prabhu envisages private trains running on the railways’ tracks, reducing its own operations."Eventually, we have to get more private sector in the operations of railways. Today, we are not able to get them because there is so much of congestion. If we create this capacity and availability, then private sector can come in and also give us a lot of money eventually without making any investment," Prabhu said. "We will own the network, they will operate the trains. We can make money out of it."Wi-fi is going to be another area that can be monetised. High speed wi-fi will be offered on 100 premium trains, leveraging the captive customer and eventually taking the service retail.The holding company being planned will house enterprises such as Indian Railway Catering and Tourism Corp. (IRCTC), Ircon, RITES, Indian Railway Finance Corp. (IRFC) and others. Proceeds from any stake sale in the units will be retained within the railways rather than going to the exchequer.More of the capital expenditure will be made through the subsidiaries. Bigger balance sheets mean they will be able to raise more resources. Disinvestment in them will help raise funds for the railways."If Ircon’s topline today is say Rs 10,000 crore, the valuation is x. If the topline becomes Rs 1 lakh crore, the valuation will 10 times higher at least," Prabhu said. "We will be able to repay the entire loan by disinvesting 25% of this subsidiary. So, we will be able to get entire capex financed without any revenue being touched."Despite financial constraints, the railways is not worried about capital spending and investment, having roped in Life Insurance Corporation of India and the World Bank to provide long-term funds."Because the World Bank is anchoring, there is a lot of interest," Prabhu said, adding that some of this is coming from pension funds."Infrastructure creation cannot happen from the current revenues of any institution, whether state government, central government, municipal bodies or anybody," Prabhu said. Hence the wide search for funds.During the year, the railways has being strengthening the institutional arrangement for faster investment, the impact of which should be visible from next year.One element of this has been decentralisation— giving greater financial powers to general managers to take decisions at zonal railways. General managers at the zonal level and production unit heads will be the tendering authority, as opposed to the Railway Board earlier."There used to be a two-and-a-half-year delay between budget announcement and tendering. This time we have brought it down to six months," he said, adding that next year will be far better as the systems are now in place. "This year already Rs 30,000 crore is available, which we are not able to spend."In order to speed up investment and development, the railways is roping in state governments that are ready to share costs and help with the investment process. Seventeen joint venture agreements have received in-principle agreement with five-six of these to be signed soon."Not only general manager-level delegation, this actually is delegating ownership and not just management," the minister said, indicating how it will help speed up investments.The railways expects the bullet train project to be running in seven years. Japan has offered a 50-year loan at 0.1% interest with a moratorium for the first 15 years, ensuring that repayments will only start long after the line opens.Prabhu sees major benefits, with up to 85% of project-related manufacture taking place in India."The principal contractors, unlike in Delhi Metro or the dedicated freight corridor, will not be Japanese. Most of them will be Indians," the minister said.The same technology can be used in other areas, he pointed out."We can, say for example, use the same technology to increase the speed of our trains to say 100 to 150 (km per hour)," he said. "And in safety they have possibly the best record."Prabhu said that it was possible to structure more deals in this way—technology with some funding, allowing for financing of the entire infrastructure development.Prabhu said there has been marked advance in four-five areas. The IRCTC website is better, improving the booking experience. Besides, travelers can book tickets on mobiles and paperless ticketing has been introduced. Food quality has improved with railways trying to offer choice to customers."IRCTC e-catering has increased to several trains and we would like to universalise it," Prabhu said, adding cleanliness levels are also up.As for clean linen, mechanised laundries are being established. Onboard housekeeping is available on 150 pairs of trains now with the number set to rise to about 1,100 trains, he said.