INDIA: Commending Indian Railways as scaling ‘a new pinnacle every year’, buoyed by a steady year-on-year increase in freight and passenger output during the last five years, Railways Minister Lalu Prasad told the Lok Sabha on February 26 that IR was now standing at ‘the zenith of success’.
Introducing the IR budget for 2009-10 and reporting preliminary results for 2008-09 to the lower house of the Indian parliament, Prasad clearly had an eye on the general election due in May. He said IR had achieved an ‘historic landmark’ by earning a cash surplus before dividend of more than Rs900bn in five years.
Reporting that the Indian Railway Finance Corp had successfully raised an Rs5bn loan in November, despite the global financial turmoil, Prasad suggested that IR’s strong performance gave it the credibility to raise debt from international markets at a competitive rate of 4%.
Freight volumes have been increasing by an annual average of 8% over the past five years. This has helped to improve productivity and cut the unit cost of operations, with payloads increasing by 15% on selected routes. Together with market pricing to incentivise traffic at quieter times and on back-haul routes, IR has improved its utilisation to 2 963 net tonne-km per wagon per year and 9·05 million net tonne-km per route-km.
Table I shows IR’s budget for 2009-10 compared to the latest estimate for the current financial year. But this has been set in the context of the country’s 11th Five-Year Plan for 2007-12, which takes little account of the downturn in the global economy.
Prasad admitted that freight growth in October and November had been ‘adversely impacted’ by the financial situation, with a steep reduction in iron ore for export and container traffic. But he was ‘confident’ that IR’s targets for passenger and freight revenue in 2008-09 would be surpassed.
Freight tonne-km are forecast to grow from 475 billion in 2006-07 to 702 billion in 2011 and passenger-km from 692 to 942 billion over the same period, and the minister said capacity building remained a critical task. Total investment during the current plan period has been set at Rs2 300bn, which is three times the level in the preceding plan (RG 4.08 p245). Around 9% of this is expected to be raised through PPPs.
Over the five years, IR is due to complete 4 900 route-km of gauge conversion, 1 800 km of double-tracking and 3 500 km of electrification, as well as opening 1 100 km of new line.
Prasad reported that the current financial year had seen completion of a rail connection from Assam to Agartala, capital of the northeastern state of Tripura — the first new connection between state capitals since independence. Rail services in the Kashmir Valley have also been expanded, and the line to Qazigund would be ready in about four months, he said.