INTRO: Shri M Ravindra, Chairman of the Railway Board and Principal Secretary to the Government of India, sets the scene for next month’s International Seminar on Railways and the third Railway Equipment Exhibition in New Delhi
WITH 62915route-km in operation - the largest network under common management outside Russia - Indian Railways fulfils a vital role in the life of the nation as the principal mode of both passenger and freight transport. Each year, our freight trains move more than 400 million tonnes, and over 4 billion passenger journeys are made.
Nevertheless, the recent change in the economic philosophy of the government has confronted our railways with the sternest challenge in their history. With the opening up of many areas to private sector and foreign participation, the pace of economic growth has accelerated rapidly.
This is having a major impact on the railways. They must respond appropriately to the pressures of market forces in a liberalised economic environment, not only to remain financially viable but also to satisfy the further growth in the demand for rail transport which is being generated by a vibrant economy. At the same time, as a public utility they must continue to be responsive to public service obligations.
During the last 45 years, IR’s freight transport measured in net tonne-km has increased 5·75 times, while non-suburban passenger-km have expanded 4·2 times. Over the same period, there has only been a 17% increase in route-km, with track-km up by 34%. Other inputs such as passenger coaches and wagons and the total tractive effort of locomotives have grown by factors between 2·0 and 2·6.
The number of people employed dropped 7% to 1643 million in the six years to March 31 1996, despite an 18% increase in revenue freight tonne-km and a 22% rise in passenger-km in the same period. In the five years to 1995-96 wagon utilisation rose by 27% from 1407 to 1792 net tonne-km per wagon-day.
All this adds up to a substantial increase in productivity and in the utilisation of assets, many of which have been upgraded technically. However, IR has nearly reached a plateau as far as improvements in the productivity of existing assets is concerned; there is a limit to this process. Further increases in transport output can only be achieved by massive capital expenditure on projects which generate more capacity.
Ninth five-year plan
The ninth five-year plan for the railways, which commenced on April 1 this year and runs to March 31 2002, has been structured to address this challenge.
The primary objective is to generate adequate transport capacity to handle the anticipated increase in freight and passenger traffic. There will be strong emphasis on terminals, and intermodal transport will be expanded. In 2001-02, the final year of the plan, we are projecting 353 billion net tonne-km and 399·4 billion passenger-km, representing increases of 25% and 15% respectively over 1996-97.
To achieve this, we intend to complete the process of replacing or rehabilitating life-expired assets, and generally modernise the network to reduce costs while improving reliability, safety and the quality of services.
The policy of converting lines from metre to broad gauge will continue with the emphasis on enhancing the capacity of the broad gauge network by creating alternative routes. The ninth plan calls for a further 6200 route-km to be converted; at March 31 1997 there were 20790 route-km of 1000, 762 and 610mm gauge lines in use.
There will be a further improvement in manpower productivity, work culture and morale. Previous staff reductions have not reduced safety; train accidents per million train-km fell from 0·86 in 1990-91 to 0·61 five years later.
To upgrade motive power, 6000hp electric locomotives designed by Adtranz and 4000hp diesels by General Motors will be introduced with AC motors. Both deals include transfer of technology leading to indigenous production.
Main line EMUs will be introduced, and also DMUs which have not been used extensively in India up to now. Another technology transfer deal will see modern coaches produced with the help of Linke-Hofmann-Busch. New wagon designs will increase the payload-to-tare ratio.
There will be an expansion of the existing computerised reservation system, which is vital in a situation where demand for long distance travel consistently outstrips supply. Computerisation will also be expanded in traditional business sectors such as accounting and inventory control. Management will be improved by long range decision support systems.
The installation of colourlight power signalling will continue with increasing use of solid-state interlockings. Upgrading of telecommunications using optic fibre cables and digital microwave is essential. Mechanisation of track maintenance will also be pushed ahead, not just to reduce costs but also to raise the quality of the permanent way.
Funding the upgrade
IR has adopted a number of initiatives to finance annual investment including the ninth five-year plan. One of these is Build, Own, Lease and Transfer. BOLT means that a contract is entered into with a supplier whereby he funds the capital cost of assets in return for ongoing payments for their use by IR. After a set period, ownership is transferred to the railway and the lease payments cease.
BOLT is already being used for gauge conversion and the procurement of locomotives and wagons. After discussions with the private sector, the railways are introducing changes to make the schemes more user-friendly; for example, a multilateral comfort guarantee is under consideration.
An outstanding example of BOLT is the 760 km Konkan Railway, which was due to open to traffic as a through route last month.
The full cost of building a 285 km railway is being met by Gujarat Pipavav Port in order to connect with the national network. Lease charges paid to GPP by the railways will be linked to a minimum guaranteed level of traffic using the line. A similar arrangement will apply to Mundra port.
The Own-Your-Wagon-Scheme involves a shipper of rail freight funding the procurement of wagons directly or through IR. The wagons are then leased to the railway on condition that the supply of wagons required to move the traffic is guaranteed. The response of the private sector to OYWS has been encouraging.
Legally enforceable contracts are being devised with private sector companies which require assurances on transit time - to ensure that a power station does not run out of coal, for example. The contracts will introduce penalty payments for failure to assure supplies in return for the payment of a surcharge on the normal tariff.
Steel plants at Daitari and Bappani will contribute towards the rail infrastructure in return for a lease charge to be paid by the railways, but part of the cost will be met by the railways and by Eximbank of Japan.
IR is also examining proposals for private participation in the construction of terminals. At Shelvona, where iron ore exports and coal imports will be handled in bulk, the cost of the land and plant would be borne by the private sector consortium under an agreement still being negotiated.
The sale of surplus railway land and airspace for property developments is generating funds that can be used for modernisation. There is also money to be made by allowing telecommunications to use the railway’s rights-of-way.
On a smaller scale, surplus space in the baggage vans of long distance mail and express trains is being leased to individual companies for a fixed charge. Kirloskar-Pneumatic has entered into an agreement with an American company to operate bimodal RoadRailers in nominated paths, but this service has not started yet.
Sterling Resorts has signed a contract with IR under which their own heritage trains, which they have purchased, can be operated for tourists at terms still being negotiated. Marketing, ticket sales and dedicated amenities at stations will be handled by this company (RBR 97 p32).
These proactive and market-oriented responses by the railways to the challenges of an open economy should enable them not only to fulfil their assigned role in the development of the national economy, but also to act as agents of the change that is so vital for sustainable growth. o
CAPTION: Second class passengers on Indian Railways’ inter-city services may now travel in air-conditioned comfort
Les chemins de fer deviennent agents de change
Avec 62915 km de lignes en exploitation, les Chemins de fer indiens jouent un r
