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Revamping Railways: RESOURCE GENERATION VITAL, by Dhurjati Mukherjee, 19 March, 2012 Print E-mail

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New Delhi, 19 March 2012

Revamping Railways


By Dhurjati Mukherjee

The former Railway Minister Trivedi needs to be complimented for Budget by underscoring modernization and safety standards, as outlined by the Kakodar Committee, within its limited resources. Indeed, given the critical finances, operational ratio shooting up from 75.9% in 2007-08 to 95% in 2010-11 and 300% increase in input costs the two and five paisa fare hike is justified. Notwithstanding, the political opposition.


Importantly, the Budget highlighted modernising 19,000 km of tracks and signalling system, eliminating all unmanned level crossings in the five years and setting up of 725 km of new lines, mainly in tribal areas. Also on the anvil is the rectification of slow moving trains to a 160 km per hour standard speed. China boasts of the famous Maglev train with a speed of 425 kms per hour.


In the pipeline is Vision 2020 formulated by the Amit Mitra (West Bengal Finance Minister)  Committee which includes developing business models for the Delhi-Mumbai industrial corridor, exploring use of railway land bank along the Eastern dedicated freight corridor, examining feasibility of public-private partnership in setting up coach factories, developing freight terminals etc.


Pertinently, the Mitra Committee pointed out a growing gap in infrastructure and technologies to cope with safety measures while the Kakodar report made 106 recommendations with a projected implementation cost of Rs 103,110 crores. Though the safety record has been satisfactory with accidents falling from 0.44 in 2002-03 to a record low of 0.15 in 2010-11 and total casualties decreasing from 1400 to 844, much need to be done.


Also imperative is the induction of advanced signalling systems to enable faster and more modern transit facilities. Shockingly, while China adds 100kms of tracks every year India a mere 100kms. Indeed the Rs 63,212 crores on track modernization is worth it. Further, planned is the elimination of 32,735 crossings --- 17,839 manned and 14,896 unmanned crossings within 5 years. With higher speed of trains planned to de-congest this is necessary.


Importantly, the railways should take a leaf from our Eastern neighbour. Think. While China adds 1000 km tracks every year since 1992, India a mere 100 km. Alongside, the ambitious Rs 28,000 freight corridor project needs to be expedited. Less said the better of over 487 unfinished projects worth Rs 14 lakh crores thanks to paucity of resources. These could be completed with private partnership.


Undeniably, the Railways need to capitalize on its biggest asset --- 300,000 acres land bank whereby enough land is available for further development of freight corridors including east-west, south-south central.  However, given the resource crunch for implementing various projects public-private partnership is vital. In fact, the rapid railway network expansion could be funded by public-private partnership as reiterated by the Prime Minister.


Also noteworthy is the initiative to set up the Indian Railway Station Development Corporation for modernising and upgrading stations. Also the proposal for a Railway Tariff Regulatory Authority and Logistics Corporation would go a long way in bringing private investment into the railways.


True, the Railway Minister ruled out corporatising the railways, what needs to be done urgently is decentralisation of power, encouragement to private participation leading to eventual corporatisation of the railways. This was recommended way back in 2001 by the Rakesh Mohan Committee as the railways did not have the funds needed for an image makeover and nor would it be able to generate the kind of resources needed to give a market rate of return on additional debt and fresh preference capital. Instead the low-growth business would drive the railways to “a fatal bankruptcy” whereby in 16 years the Government would be saddled with “an additional financial liability of over Rs 61,000 crores”. Though many concurred with it but as the political and business environment was not conducive it was relegated to history.


Undeniably, even as Indian Railways have traversed a long way there are many challenges which need attention. Five components are critical. One, reorganisation of the core transportation network into key components, freight, passenger, suburban, fixed and shared infrastructure; two, track renewal and modernisation to ensure faster trains movement, three, railway network expansion all over the country; four, ensuring proper safety standards to reduce accidents and last but not least improving flexibility and cost competitiveness.


Now with Sam Pitroda heading the Railway Modernisation Committee and Kakodar the Railway Safety Committee things are expected to move faster. According to Pitroda the railways need to spend Rs 8.23 lakh crores over the next five years on upgradation and would require Rs 2.5 lakh crores of Central assistance. The Kakodar Report pegs the figure at Rs one lakh crores annually to meet its safety requirements, including Central assistance of Rs 5000 crores every year over a five-year period.


Clearly, faced with huge expansion plans, track renewals and taxing safety standards, the railways would need a minimum of Rs three to four lakh crores in the next 5 years towards gauge conversion, freight corridor along-with feeder routes upgradation, augmentation of high density routes and increasing the manufacture of rolling stock.


As the railways are a highly labour-intensive system it is not surprising that two-thirds of the accidents are on account of human failure. Consequently technology upgradation programme needs to be geared up in order to reduce dependence on the human element, as is most countries. But this is a costly process and the pace, stage and level of technology depends on the extent of investment, size of operations, increasing demand of traffic and assimilation of technology. Yet India has no option but to carry forward steadily.


All in all, there is an imperative need to revamp the whole railway system to improve its viability, quality of services and ensuring safety standards. Undoubtedly, this is enormously challenging which is achievable through proper planning and phased privatisation. Simultaneously, parochial interests of politicians should not come in the way of implementing the action-plan during the coming decade keeping in view the priorities and challenges that lie before the railways. ---- INFA


(Copyright, India News and Feature Alliance)

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