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Higher capacity has priority in huge IR investment programme

01 Jun 2002

INDIAN RAILWAYS has announced an unprecedented programme of investment to raise capacity across the network. Under newly-appointed Chairman I I M S Rana, the Indian Railway Board is proposing to spend Rs260bn on new lines, further gauge conversion, double tracking and resignalling over the next seven years (p322).

On May 16 the Finance Ministry asked IR to provide detailed funding proposals. This suggests that the programme has strong government support, and will allow arrangements to be drawn up for securing finance from organisations that may include the World Bank, the Asian Development Bank, and the Japan Bank for International Co-operation.

IR's programme is geared mainly to raising capacity on the trunk lines in the 'Golden Quadrilateral' linking the major cities of Delhi, Mumbai, Kolkata and Chennai. Around Rs130bn is earmarked for improvements to these busy routes, with completion of electrification along the Bay of Bengal coast between Kharagpur and Bhubaneswar due by March 2003.

A start has been made on wiring the Chennai - Pune main line, with work proceeding between Guntakal and Renigunta. This is due to be finished by March 2004, leaving only the Guntakal - Pune section without electrification. Although no date has been set for this to be completed, surveying is in progress.

Another Rs120bn is intended for resignalling and other safety-related projects, finance for which will come from the Special Railway Safety Fund authorised by the Prime Minister in July last year.

Although in the accompanying interview IR Chairman I I M S Rana is non-committal about the possibility of reform in response to the Rakesh Mohan Committee's report on IR, there are suggestions that the Indian Railway Board is starting to take the prospect of major change seriously.

Railways Minister Nitish Kumar presented a 'status paper' to Parliament on May 16 in which there are hints of an end to the status quo as the government urges IR to move towards commercial viability. Halting the cross-subsidy of passenger services from freight revenues, for example, is now on the agenda for discussion, as is the disposal of non-core businesses. One suggestion would see IR's rolling stock and loco plants reorganised to allow them to export more effectively.

Whether the Board - or the government - is prepared to confront the fundamental issue of restructuring IR is another matter.