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Business News/ Opinion / The abysmal state of Indian Railways

The abysmal state of Indian Railways

Large-scale investment is required to turnaround the moribund network

Illustration: Jayachandran/MintPremium
Illustration: Jayachandran/Mint

Even as the new international terminal in Mumbai is being hailed for its unique design and space utilization, spare a thought for the 23 million harried passengers who use India’s moribund railway network every day. Indeed, if there is a campaign promise that Narendra Modi made in his speech to party delegates that desperately needs fulfilment, it is the one to do something about one of India’s last bastions of state-sponsored decay. So abysmal is the future of this vital piece of infrastructure that in its dying throes, even the United Progressive Alliance government is reported to be looking at opening the sector up to foreign investment.

It will need much more than drip irrigation by foreign funds though to turn this modern-day relic into anything remotely resembling a speedy and efficient means of commuting. To gauge how little our railway network has progressed consider this piece of trivia: On 16 April 1853 the first ever railway train in India, carrying 400 passengers, covered the 34km distance between Bombay and Thane in about 75 minutes, a speed of 28kmph. A 161 years later, in Mumbai a slow train runs at an average speed of 50kmph. Even our much-vaunted Shatabdis run at speeds that had already been achieved in pre-war Europe. The Berlin-Hamburg service was launched in 1933 and ran at an average speed of 124kmph. Peak speeds were 160kmph. That’s substantially faster than any Indian train today, 80 years later.

That crawl is a metaphor for the overall underperformance of this sector. In terms of the total infrastructure investment achieved in the 11th Five-Year Plan, railways underachieved by 25% while telecom, and gas and pipelines overachieved by 25% and 80%, respectively. If Indian Railways hasn’t collapsed much as Air India, it is because there has been no competition to it. A cadre of technically-trained officers who have nowhere else to go and have some sort of a culture of competence, no matter how devalued now, keeps the juggernaut’s wheels rolling. But that makes the opportunity loss even larger. It isn’t just operations and peripherals like the state of the stations that are a disaster. Such critical areas like research and development, and manufacturing are in equal state of disarray. By rights, given the size of the market (the fourth largest rail network in the world), India should have had the best signalling, engine and coach industries in the world. Instead, almost every major piece of technology has to be imported. When we need a world-class system like the Delhi Metro, using domestic technology isn’t even a thought.

And belying the efforts of such messiahs of the poor as Nitish Kumar, Mamata Banerjee and Lalu Prasad who have in the past worked as railway ministers, the poor have been ill-served in terms of additional railway lines. In the 66 years since independence, India has added 13,000km of new railway lines. China, says a report by Ernst and Young, added 14,000km just between 2006 and 2011 and China Railway Construction Corporation has announced plans to invest $104.2 billion in fixed assets in 2014. Nor is China the only one. Recognizing the significance of rail networks, there is a resurgence of investment in the sector the world over. In the last decade the Arabian Peninsula has become a preferred destination for railway investment. Deutsche Bahn, the German railway company, is planning to spend €4-6 billion on modernization and renewals including maintenance.

It is something Indian Railways needs to do desperately as the hundreds of deaths in train accidents each year suggest. The high-level safety review committee in 2012 admitted: “The financial state of the Indian Railways is at the brink of collapse unless some concrete measures are taken. Passenger fares have not been increased in the last decade during which many passenger-carrying trains were introduced on the existing overloaded infrastructure. This has strained the infrastructure way beyond its limit and all the safety margins have been eaten up pushing Indian Railways to a regime of adhocism in infrastructure maintenance."

Trains aren’t an anachronism in this era of flying. According to a 2011 study by Deloitte Access Economics, rail networks lead to “improved land use and urban densification, lower carbon emissions, reduced congestion and enhanced energy security." The report indicates that, for passenger journeys, every trip made on rail rather than road can reduce costs to the society by between $3 and $8.50, depending on the city, while for freight the savings are estimated to be around 95 cents for every tonne-kilometre. The estimates were based on congestion, accident and carbon emission costs and the report suggested that there were additional benefits from social inclusion, reduced infrastructure maintenance costs and fuel security.

India’s railway system has an annual revenue base of $19 billion. It is an opportunity crying to be seized.

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Published: 22 Jan 2014, 06:25 PM IST
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