Railways
The 150 year old Indian railways employs over 1 million people and carries some 13 million passengers and 1.2 million tones of goods on 13,500 trains a day.
The rail network is the largest in the world under a single ownership and is one of the pillars of India’s economy. However, it is chugging more and more into the red.
Fifty years ago, it carried most of the country’s freight but today road transport carries more. The freight trains are profitable but its market share is shinking. -- Nirmal Ghosh
Table: Performance of the Railways
Indian railways, the one of the most extensive rail network in the world have a route length exceeding 62,495km and a track kilometrage approaching 100,000km. Standard gauge lines account for over 53% of total route kilometers while metre gauge makes up 40% and narrow gauge the balance. Freight carriage and passenger movement are predominantly by standard gauge, which accounts for an estimated 88% of total freight tonne kilometers and about 82& of passenger kilometers. Traffic densities on the system are not high. During 1986-1987, traffic density has been estimated to be at 6,400 tonnes for every route kilometers of standard gauge line.
Steam traction has progressively given way to diesel and electric. Over 7,000 route kilometers are electrified and electric traction accounts for over 22.3% of gross tonne kilometers of freight traffic. Diesel traction accounts for over 65%. In passenger traffic however, steam traction still commands a 33% share. The locomotive fleet consists of about 3,000 diesel, 1,250 electric and 6,000 steam locomotives. It is envisaged that steam traction will be entirely be replaced at the turn of the century.
The freight rolling stock is estimated to be 375,000 units with large capacity wagons making up an increasing proportion of the total; the coaching stock is estimated at 32,000 units, including over 2,800 electric multiple units used for suburban passenger traffic.
Since 1950-1951, freight traffic has increased at an average annual rate of 3.1% in terms of originating traffic. Due to increases in average distances, tonne kilometrages grew at an average rate of 4.2%. Between 1980-1985, originating traffic grew at 3.95% and haulage (tonne km) grew at 3.0%. Bulk commodities accounted for over 80% of the total originating traffic with coal alone accounting for almost 40%. Much of the increase in originating traffic has also come via the growth on coal moved by the railways. Between 1980-1985, coal moved rose to 26 million tones of the total 46 million tonnes increase in originating traffic handled.
Long-term trends indicate a 1.6% growth in non-suburban passenger traffic and a 4.6% growth in suburban passenger traffic. However, due to fare rationalization exercises undertaken since 1980s and the growth of personal transport, a significant decrease in the growth rate is evident from both areas and these trends are likely to stay.
The increased emphasis on modernization has been translated into high targets for electrification. Energy costs currently account for an estimated 25% of total annual annual operating expenses of the railways. In a bid to improve energy efficiency, increased electrification of the routes is being planned. During the 1987-2000 period, an additional 9,000 route kilometers would be electrified taking the total to 160,000 kilometers. The electrification programme is estimated to cost over Rs 22 billion.
Railways are working on the advanced 2 X 25 KVA electrification system, which uses a limited amount of overhead line as a backup scheme and to save energy. By reducing the need for substations, the new system would also directly reduce electrification costs. Additionally, this system is expected to cut power consumption by 15%.
Traffic increases on the already congested trunk routes are being planned with heavier and faster passenger and freight trains. The maximum training load of freight trains has been raised to 4,500 tonnes from earlier levels of about 2,000 tonnes. Special purpose wagons, which could raise wagon utilization are designed. Coach design and manufacturing have also been subject to substantial modernization. The coach works at Kapurthala in Punjab. Along with the older ones at Madras, are expected to produce 2,300 coaches annually.
Along with these developments, an improvement programme for locomotives is being implemented. A US$375 million project with a US$190 million multilateral finance component is undertaken to cover the imports of state-of -the-art electric locomotives of 6000 HP rating and the know how to manufacture them at Chittaranjan Loco Works. The existing design of electric locomotives manufactured at the works has a rating of only 3,900 HP. Diesel locomotives in the 2,600 HP range is being manufactured at the Diesel Loco Works at Varanasi are also upgraded. Designs for more fuel efficient diesel engines in the 4,000HP range are also in progress.
The ability of the existing track structure to withstand the increased loads and speeds is however subjected to some doubts. Already, track renewal backlogs amount to over 22,000 kilometers. By the year ending 1999, a further 35,000 route kilometers will be necessary. Track renewals are expected to involve an investment of over Rs 90 billion, almost 20% of the expected investment on railways from 1987 to 2000.
The railways are now working on an operating strategy that will be more in tune with technological progress and changing traffic conditions. Improving the efficiency of asset utilization is a major priority with rail planners. Net tonne kilometrage per wagon per day has risen from 986 in 1980-1981 to over 1,300 by 1987. Moreover, average wagon turnaround time has dropped from 14 days to 10.7 days in the same period. It ahs been estimated that a one-day reduction in wagon turnabout time means annual savings in excess of Rs 5 billion.
A project designed to bring computers and modern telecommunication systems into freight management Almost ¾ of the proposed Rs.13 billion outlay is earmarked for developing a telecommunication network that will link up the whole system.
The World Bank’s participation in the India’s railway system modernization has been impressive with 7 loan tranches completed by 1982. The increasing resource needs of the railways may necessitate the consideration of other financing options. Resource gaps have induced a tapping in the capital markets through the Indian Railway Finance Corporation. The first railway bond issue in fiscal 1986 had helped raised Rs 5.6 billion.
The Indian Railways, one of the pillars of the Indian economy remains a political tool although it faces massive funding problems, which are hampering efforts to modernize the organization.
Railway Minister, Ms Banerjee, leader of the Trinamul Congress from West Bengal did not raise passenger fares in her populist Year 2000 railway budget but instead raised freight fares. Some exemptions from the freight hike are granted to restrain inflationary and public pressure.
Track and signal renewal was allocated some Rs 20 billion, which is cited as inadequate from some analysts. However, the pro-poor budget went down well with the public as there is not a year without a hike in passenger fares.
The budget is mildly reformist and this spawned cynicism among economists and the media. The reckless giveaways in the budget may further worsen finances of Indian Railways.
Railway analyst C M Khosla wrote that, “The financial impact of social services obligations from passenger traffic has jumped from Rs 18 billion to nearly Rs 45 billion. Investment still flows largely into politically populist but highly unremunerative projects. The investment policy provides only for a small percentage of capital investment towards optimistic extra capacity, towards technological upgrading, increasing efficiency , productivity and promoting safety.”
The investment backlog of the indain Rialways is now estimated to be about Rs 40 billion.
Highlights of the budget:
1) The introduction of at least 19 new trains amid projected passenger growth of 5%
2) Free travel for girls going to school , up to the age of 12.
3) Information technology to be harnessed to enable the public to view schedules, buy tickets from computerized machines and book tickets over the Internet.
4) 5% hike in some already high freight rates which is expected to generate some Rs 6 billion.
· The Indian Railways consists of an extensive network spread over 62,495 km, comprising Broad Gauge (43,083 km), Metre Gauge (15,804 km) and Narrow Gauge (3,608 km.). Electrified networks with a length of 13,962 km. account for 22.3 per cent of the total route kilometer. Gauge conversion of 847 km. It was completed during 1997-98.
· During 1997-98, revenue earning freight traffic moved by Railways was over 429.4 million tonnes. This was 5 per cent higher than the performance in 1996-97. The freight traffic carried during April-November 1998 at 270.5 million tonnes, decreased by 2.2 per cent over April-November 1997. A positive growth rate has been witnessed in iron ore for export, fertilizers, POL and balance (other goods). All other items including coal, raw materials for steel plants, iron & steel, cement and food grains showed a decline in carriage (Table 9.6). The slowdown in industrial production and economic activity in general has adversely affected freight traffic.
· The Railways employ about 16 lakh persons, the largest for any undertaking in the country. Manpower planning systems in the Railways have resulted in staff reduction, in absolute numbers, despite a higher level of activity and traffic growth. This has been made possible by enhanced staff productivity. The manpower decision-making process has been strengthened through computerized analysis of manpower data and productivity- related benchmarking exercises. A number of initiatives have been taken to improve the learning environment in the railways by putting in place a framework for management of the training function.
In view of the need to discharge the responsibility of a public utility service and operate as a commercial undertaking, the Railways have to incur expenditure on the operation of unremunerative lines and on the provision of services below cost. The budgetary support to the Railways has declined sharply from 75 per cent of the Railways Plan outlay in the Fifth Plan to 23 per cent during the Eighth Plan. In the first year of the Ninth Plan, i.e. 1997-98, budgetary support again amounted to 23 per cent of the plan outlay. In order to meet their growing investment needs, the Railways have had to increasingly take recourse to market borrowings, which increased to Rs.2,971 crore in the year 1997-98, or about 35 per cent of the plan outlay. As a result, lease charges being paid by the Indian Railways have also risen to Rs.1,929 crore in the year 1997-98. Increased market borrowings have thus constrained the Railways’ ability to mobilise internal resources and has induced it to reprioritize some of the ongoing development projects.
· While there is scope for raising internal resources through tariff adjustments, over the years, the Railways have kept the passenger fares low with a view to providing an affordable transport facility to the common man. The losses in passenger services are being met through cross-subsidy by the freight business. Efforts are being made to contain this unsustainable trend and reduce the element of cross-subsidization while conducting freight business in a more customer-friendly and growth-oriented manner. The Railways have taken up schemes like Build-Own-Lease-Transfer (BOLT) and Own-Your-Wagon Scheme (OYWS) to encourage private participation and also to supplement resources. With the twin objective of increasing the volume of traffic and encouraging private sector participation, a new scheme of Leasing of Luggage Brake-vans and Parcel-vans, has been introduced. A major step taken by the Railways has been to cater to piecemeal traffic by providing containerized service through the Container Corporation of India Ltd. (CONCOR). Two other schemes under Multi-modal Transportation, namely, Road Railers and Piggy Back System, involving the private sector, are also being pursued.
Performance of the Railway
1996-97 1997-98* 1997-98 1998-99 1997-98 1998-99
Total revenue earning freight traffic 409.0 429.4 276.7 270.5 5.0 -2.2
(million tonnes)
(i) Coal 198.2 208.7 135.2 129.3 5.3 -4.4
(ii) Raw Materials for steel plants (excl.coal) 38.6 37.8 24.6 24.1 -1.9 -2.3
(iii) Pig iron & finished
steel from steel plants 11.8 11.8 7.5 7.0 -0.2 -7.6
(iv) Iron ore for export 10.3 12.2 7.6 7.8 17.6 2.0
(v) Cement 34.1 37.4 23.9 22.3 9.5 -6.6
(vi) Foodgrains 29.8 26.3 17.7 16.9 -11.7 -4.4
(vii) Fertilizers 21.2 26.7 17.9 18.0 26.0 0.5
(viii) POL 28.5 30.7 20.0 21.4 7.7 6.9
(ix) Balance (other goods) 36.5 37.8 22.2 23.8 3.5 7.5
2. Net tonne kilometers (billion) 277.6 284.3 185.6 180.3 2.4 -2.8
3. Net tonne kilometers per wagon per day
(broad gauge) 1840.0 1867.0 1838.0 1793.0 1.5 -2.4
4. Passenger traffic originating (million) 4153.0 4348.0 2902.0 2952.0 4.7 1.7
5. Passenger kilometers (billion) 357.0 380.0 245.3 252.9 6.4 3.1
* Provisional. @ April-November
