Time for an overhaul

Having served the country for more than a century and a half, the Indian Railways has taken apathy in its stride. Politicians’ whims, and not economic planning, have dictated its existence. But now, the tracks on which the giant moves have begun to show signs of stress. The health of this ailing mammoth needs to be restored. Arnab Pratim Dutta and Anupam Chakravartty trace the network’s ailments and examine ways to bring it back on track

By Arnab Pratim Dutta, Anupam Chakravartty
Published: Saturday 31 March 2012

Time for an overhaul


IT was already 10 pm. The Taj Express should have been crawling into Delhi’s Hazrat Nizamuddin station. Porters should have been hustling into coaches, their entry blocked by passengers eager to alight after a long journey. Amid the flurry, the woman at the public announcement system should have announced the train’s arrival, on time.

But this was not to be. The Taj Express was stranded near Faridabad. The frustrated passengers had started to play the blame game. While one accused the driver of steering the train too slowly until the signal turned red, another wondered if it was giving way to a passing train. “The train had reached Mathura on time. Indian Railways is so inefficient that it can even delay a train running on time,” said one. Just then Bhopal Shatabdi, the country’s fastest train, whizzed past. The Taj Express had sacrificed its on-time performance for the prestigious train. It reached Hazrat Nizamuddin station 45 minutes behind schedule.

Passengers are accustomed to such delays. Poorly maintained coaches, unhygienic toilets and bad food add to the frustration. And yet, one cannot but marvel at the world’s largest people mover. The railways carried 7.2 billion people—more than five times the country’s population—to their destinations in 2010-2011. Despite the delays, it has managed to maintain an on-time performance of over 80 per cent.


Track record

The railways has always given much more than it has received. Official statistics hammer this point home. Independent India inherited close to 50,000 km of tracks from the British. In 64 long years, the country could add only 15,000 km. What the country did increase was the number of passenger trains. In the past 10 years, close to 1,000 trains were brought on the tracks.

“More trains, increase in their frequency and addition of more coaches per train have left the railways in a peculiar situation,” says the report of a high level safety review committee chaired by Anil Kakodkar, former chief of the Atomic Energy Commission Board. “Such massive additions every year … without a serious thought … have severe implications on safety preparedness of railways,” the report submitted to the railway ministry in February 2012 says.

Similar doubts were raised by Vision 2020 for the railways presented to Parliament in 2009. The trunk route, or Route A, connects the country’s four main metros—Delhi, Mumbai, Kolkata and Chennai. The route comprises 16 per cent of the total track length but it bears 50 per cent of the railway’s traffic, it says. A senior railway official concurs. The route between Kolkata and Delhi bears about 150 per cent of its capacity, he says. The other trunk routes are also oversaturated and bear 120-130 per cent of their capacities.


Difference in speeds of trains is another big problem. The railways has planned dedicated corridors for freight and high-speed passenger traffic. But they will continue to use the same tracks for about five years, creating logjams. “We have a network where goods trains run at a speed of 25-40 km per hour,” says a railway official. On the same network, the Bhopal Shatabdi Express speeds up to 150 km per hour. Slow passenger trains run at 40 km per hour on the same track as the Rajdhani Express, which speeds up to 130 km per hour. “Considering the heavy congestion and very high speed differential among trains, it is extraordinary that the railways operates efficiently,” says an official.

  The trend of appeasing political allies with the railway portfolio started in 1996 when the BJP came to power and formed a coalition  
In politics, railways has become a portfolio that can appease important allies and guarantee a stable government. For the last decade and a half, coalitions of parties have formed governments at the Centre. The trend of appeasing allies started in 1996 when the Bharatiya Janata Party came to power and Ram Vilas Paswan of Lok Janshakti Party was made the railway minister.

C K Jaffer Sharief (1990-95) and Suresh Kalmadi (1995-96) were the last two railway ministers when the Congress was in power on its own. Ever since coalition politics took over, the railway budget has become a tool to promote populism. Politicians use it as an easy means to project a pro-people image. Train fares have not increased in the past eight years. In fact, in 2004-05 the then railway minister Lalu Prasad decreased the fare by Rs 1 for the cheapest class and by seven per cent for the higher classes.

Road over rail

Long wait for bookings has made railways’ commercial operations unattractive. Passengers have to book train tickets months in advance. The situation is no better on the freight front. “We have to refuse bookings quite often. We give preference to those who ask for the entire rake over those who seek a wagon or two,” says a senior railway official.

It was for this reason that Ramesh Solanki, who runs an import-export firm in Vadodara, was suffering a long delay. When Down To Earth met him in February 2011, he had been waiting for four weeks at the Inland Container Depot in Dasarath village to get his container on the train that connects to the Mazgaon dock in Mumbai. Solanki had to send the container to a vessel waiting to go to South Africa. The delay was because only two trains ply between the Mumbai port and Vadodara. It is the long wait that makes business unprofitable.

Many transporters now prefer road network over railways (see ‘Freight share’). But it is not an easy choice. The Vadodara-Mumbai highway, for instance, has seven toll gates that charge between Rs 200 and Rs 400 for a 450-km journey. Additional expenditure for a truck could be as high as Rs 2,500. The proposition becomes very expensive. In comparison, railways charges 56 paise per km for a one-tonne container.

  The 11th Five Year Plan gave railways Rs 8,000 crore for modernisation. In comparison, roadways got Rs 60,000 crore and airways Rs 30,000 crore  
For passengers, railways promises cheaper travel at higher comfort levels. The 933-km travel from Ahmedabad to Delhi by sleeper class costs Rs 343, or about Rs 37 per km. An AC III tier ticket costs between Rs 570 and Rs 1,000 depending on the train. Buses charge between Rs 700 and Rs 1,200 for the same journey.

Not only is railways cheaper, it is also more benign towards the environment, say reports. The Planning Commission’s Expert Group Report on low-carbon strategies for inclusive growth suggests that railways and waterways should be promoted for their low carbon footprint. In 2007-08, railways’ carbon emission for moving one tonne of freight over a kilometre was three tonnes. In comparison, the road sector’s carbon emission for the same was 66 tonnes, the report says. Intercity passenger trains emitted four tonnes of carbon for every passenger per kilometre compared to 35 tonnes for road transport (see ‘Rail, road carbon emission share’).


Rail fares better than road in terms of energy consumption and thus reduces pollution, says V S Ghai, senior fellow at the Delhi-based Asian Institute of Transport Development, an independent transport research organisation. Rail transport makes only about a fifth of the effort of road transport to move goods. In a rail-bound system, it is easy to form long trains, says Ghai.

Yet, businesses have shifted from railways to roadways. In the 1950s, railways commanded a monopolistic share of over 88 per cent in the freight segment. Now, road transport controls more than three quarter of the total market (see ‘Economics of passenger services’). In 2009-10, railways carried close to 900 million tonnes freight and transported 7.4 billion people. The figure sounds impressive. But roadways’ figure overshadows it. It carried 1,230 million tonnes freight and 10 billion passengers.


Railways’ share in freight traffic has declined from 24.07 per cent in 2001-02 to 20.89 per cent in 2009, says the journal of transport of the South Asian Association for Regional Cooperation (SAARC). In 2009, roadways shared 79.11 of the freight traffic. In the past decade, road transportation has grown by 7-8 per cent.

IMAGERailways, however, has stagnated at less than five per cent growth. While the projected growth rate in commodity freight traffic was about 9 per cent for 2011-12, the railways could only achieve 4.4 per cent.

Investment: nil

Call it a systemic rot or government’s failure, the railways, as the Kakodkar committee points out, is on the brink of collapse. No expert is required to say that this is because of meagre investments. The overall balance sheet is in the red, be it because of passenger services or freight operations.

As per its own white paper, in 2008-2009 the railways spent Rs 550.97 for every passenger kilometre. What it earned was Rs 412.22. That year alone, passenger services incurred losses close to Rs 14,000 crore.

What transport modes want
  RAILWAYS: The proposed modernisation plans for the Indian Railways in the 12th and the 13th five year plan promise to add 1.5-2 per cent to the present freight growth rate of 7 per cent per annum. The plans propose to improve 21,225 kilometres, including the proposed Dedicated Freight Corridor of 3,000 km. The corridor has achieved financial closure with Rs 204 lakh crores.

The 11th Five Year Plan had targeted passenger kilometre volume growth rate of 6.2 per cent. But in the first three years of the plan, growth rate had reached 9.9 per cent. To modernise services railways needs Rs 560,000 crore.

ROADWAYS: The National Roads Policy, published for the 11th Five Year Plan, says that the average annual growth rate of this sector is 9 per cent. According to the National Highway Development Programme, a seven-phase road development programme scheduled to end by 2016, will cost Rs 169,500 crore. The programme includes six-laning and four-laning of highways and creation of 1,000 kilometre of expressway.

AIRWAYS: The total airspace of India is about 2.8 million nautical square miles. Passenger traffic is expected to grow from Rs 11.97 crore in 2010-11 to Rs 31.66 crore in 2022-23, at a growth rate of 8.44 per cent.

The department of economic affairs in the finance ministry says that although the year 2008-09 saw a dip in the growth rate, by 2022-23 air cargo traffic is expected to grow by 8.14 per cent. The Indian market would require additional cargo capacity. As many as 1,000 commercial jets costing approximately Rs 4.27 lakh crore would be needed by 2030.
While passenger services consumed about 60 per cent of the network capacity, their share in the earning was a measly 33 per cent. In the past five years, the difference between revenue and expenditure has widened to dangerous levels. “Lack of a tariff regulatory authority, autonomy in taking decisions across various departments and a far-sighted vision are leading the Indian Railways to losses,” says G Raghuram, faculty at the Indian Institute of Management-Ahmedabad and member of the Pitroda Committee. The panel, headed by Sam Pitroda, was formed last year to recommend ways and means to modernise the railways.

But without adequate funds, the railways cannot undertake operation and maintenance activities, replace old assets, or develop new assets based on advanced technology, says the Kakodkar committee report.

In 2009-2010, the railways earned close to Rs 90,000 crore. But its total expenditure was a high Rs 84,000 crore. Increase in wages after the sixth pay commission was a big reason for the high operating ratio. The staff cost doubled within two years from about Rs 26,000 crore in 2007-08 to about Rs 51,000 crore in 2009-2010. Now, the railways spends 60 per cent of its earnings on wages (see ‘Railways finances’). At present, the operating ratio of railways stands at 92 per cent. The ideal ratio for a sustainable enterprise, says Raghuram, is about 80 per cent. The extra income could be used for expansion and upkeep.

The 11th Five Year Plan did not draw enough investments to modernise its systems. In the past five years, less than Rs 8,000 crore was invested in railways, says a planning commission official. Compared to this, roadways got Rs 60,000 crore and airways Rs 30,000 crore. Most of the money for development of roads and airports came through private participation. There has been no private sector project in the railways (see ‘What transport modes want’).

A World Bank consultant on major transport concurs. Private players, he says, are excited about the projects because of their business propositions. Once a road or an airport becomes operational, cash starts flowing immediately through toll tax or airport service fee. No such concept exists in the railways.

The government plans to set up new tracks parallel to congested routes, which bear 120 per cent more than their capacity. But the parallel route will take only about 20-30 per cent of the traffic. “Imagine, private players will have to wait for 10-15 years for the new line to get adequate traffic. No private developer would be willing to spend so much time and money,” says the consultant.

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