Lest we miss the train

The single most important initiative to increase capacity and reduce unit cost of transportation, the Dedicated Freight Corridors (DFC) project, sanctioned three years back, is yet to even start. This delay will have a serious impact on freight movement and the national economy. The IR is still to develop capacity to deal with such large projects and we are likely to witness major time and cost overruns. One needs to learn from the experience of the NHAI in handling mega projects.

In the 10th Plan five year period, traffic facilities and doubling which directly add to the capacity of the network, got only Rs 5,112 crore, a paltry 6.03 per cent of the total plan outlay of nearly Rs 85,000 crore! Against this the expenditure on new lines, most of which are built on political expediency, was Rs 9,024 crore, 10.65 per cent of the outlay. Investment in electrification, gauge conversion, etc does not give any real increase of capacity, but consumes scarce resources. The current budget again has big outlays on new lines, gauge conversion and electrification.

The budget talks of investing Rs 75,000 crore in saturated transportation routes in the next seven years. There is intent to get Rs 1,00,000 crore through public private partnerships (PPP) in five years but there is no policy document, nor any model concession agreement in the public domain to inform investors. Railways needs to make concerted efforts to woo investors and create a strong project management system.

One hopes that measures like greater use of IT for passenger information, improved stations, and better cleanliness will be implemented quickly as these are basic needs of passengers.

Freight rates, already high, seem to go higher each year through simplification and rationalisation of rates done during the year. I support the process of regular adjustments since IR has to run as a commercial body but the high transport charges are making our goods less competitive globally. In fact, the rates have gone up by 20 per cent in the last six years based on average revenue yield per million tonne.

The budget is an occasion to review the progress of important projects. Apart from the DFC, mega projects like the Wheel Factory at Chhapra, Electric Loco Factory at Madhepura, the Coach Unit at Rae Bareilly and the Diesel Loco Factory have yet to take off. A new coach factory in Kerala has been added to this list now. The list of sanctioned railway projects of maybe more than Rs 75,000 crore is now a serious worry since more get added each year with painfully slow completion.

The production units of IR loco works at Chittaranjan, Varanasi, coach units at Chennai and Kapurthala, wheel factory at Bengaluru can be made into international hubs supplying to railway systems worldwide with injection of capital and new technology. The minister had announced a possible corporatisation of Rail Coach Factory, Kapurthala in the 2006-07 budget. No progress in this direction is evident.

Budget 2007-08 had spoken of pre-feasibility studies for high speed train corridors which do not find any mention this year. I hope the idea has not been abandoned as such links will bring economic development around important cities as it has taken place in other countries. It will also bring IR on par with other world railways.

One cannot really fault this year’s budget intent. It is necessary that the announcements made in the budget are translated into actual implementation and that they conform to the prescribed time schedules.

Chak is director (International Relations), Asian Institute of Transport Development, New Delhi