Railways needs to invest Rs. 250,000 crore in capacity additions
The Railway board officials explain that a series of steps have been planned over the next four years to augment capacity, build the dedicated corridors, set up a strategic business unit, and enhance the profile of the Railways.
Over the past four years, the Indian Railways has consistently achieved its target for freight movement. From 557 million tonnes carried in 2003-04, it has achieved 790 million tonnes last year, and set itself a target of 850 million tonnes for 2008-09. The traffic officials in the Railways seem confident of achieving this, but want a higher priority accorded to freight specials and container trains. Already, in the first quarter, the Railways has moved just over 270 million tonnes. So the target is achievable.
The proposed Dedicated Freight Corridors (DFCs) — linking the north with the west and the east — may be the best solution to the traffic bottlenecks in the clogged network. But that may take four to five years to build. Till then, the Railway Board has to work within the existing system to move more cargo and generate higher revenue.
Railway Board sources say that compared to the speed and punctuality of the passenger super fast and express trains, the priority accorded to freight specials and container trains leaves a lot to be desired. “If only we could ensure that a Delhi-Mumbai, Delhi-Howrah, or a Chennai-Delhi freight train could reach its destination in the same 24 to 36 hours that we provide for passenger expresses, we can achieve so much more in freight business. In the existing system, this is not possible,” regrets a senior freight official.
The board officials explain that a series of steps have been planned over the next four years to augment capacity, build the dedicated corridors, set up a strategic business unit, and enhance the profile of the Indian Railways. Considering the fact that the Railways has not only not raised the freight tariff, but also rationalised the entire framework to make it very competitive, the authorities want to build on this factor.
The officials say that given the high growth path of the economy, the Railways needs to invest over Rs. 250,000 crore on capacity building measures over the next five years. A good proportion of this investment may come from internal resources and budgetary support from the Centre. But such an outlay will surely entail the participation of the private sector through the Public Private Partnership (PPP) model that seems to be catching on the infrastructure sector.
Under the DFC scheme, the Railways plans to initially cover 2,700 route km (about 5,000 track km), involving an investment of Rs. 28,000 crore, linking the ports and mines of Eastern India to Delhi and Punjab. This project will be done through a special purpose vehicle (SPV), in a mix of engineering procurement and construction and PPP methods. The focus will also be on high-speed corridors (for passenger traffic), operation of container trains, construction of multi-modal logistic parts, and augmenting port connectivity.
Under the port connectivity programme, some of the projects to be taken up include: Palanpur-Gandhidham gauge conversion, Haridaspur-Paradeep new line, Anugul-Sukinda, Obulavaripalli-Krishnapatnam, Bharuch-Dahej, and Surai-Hazira sections, as also Penn-Rewas port. Simultaneously, the rationalisation of freight tariff has now been completed. Except for a few commodities, the difference between the highest and lowest rates is not more than two times. The Railways has also come up with an ‘Empty flow direction freight discount scheme,’ offering a 30 per cent discount for peak as well as non-peak seasons. To make it even more attractive, for loading of incremental traffic in empty flow direction from private sidings, the rebate has been raised to 40 per cent.
Strategic business unit
For the strategic business unit, the focus will be on port traffic, steel, and cement, besides container movement. During the XI Plan, the Railways hopes to achieve 800 million tonnes traffic from these sectors alone, with the target for freight moving going up to 1,100 million tonnes.
Container traffic needs to pick up even more, and the target for the XI Plan is to generate 100 million tonnes. Private contractors have been permitted to manage rail-borne container services and concession agreements offered to 15 private operators. Others are welcome to join, as there are only 45 rakes with the private operators now. Whatever else gets done or not, speed is the essence of competition now. Unless the Indian Railways gets its act together on that front, its tariff or computerised monitoring of freight movement will not do.