The Hindu Business Line : Some signposts, not a clear road map in Rail Budget

In the past four years, Indian Railways transported an additional 233 million tonnes (mt) of originating freight traffic and in the next four years, it proposes to handle an additional 310 mt. How it is going to be achieved is not clear from the Mr Lalu Prasad’s Railway Budget for 2008-09. What has been presented in the Budget are some signposts; not a clear road map.

Freight growth

The issue of a clear road map is important due a variety of reasons. If the economy grows at an estimated rate of nine per cent, the Railways’ freight throughput should grow at least by 13- 14 per cent, if not more. This is the historical correlation. However, the freight traffic growth of the Railways has been steadily dwindling. For the past few years, the Railways has been transporting on an average an additional 60 mt every year. On an expanded base, a fixed volume of throughput will mean a lower growth. That is what is happening exactly. One important fallout of it will be that the Railways will continue to lose its market share to other modes of transportation.

Projected traffic

The projected traffic figure is in fact notional . This is because the minimum chargeable weight is 65 tonnes. Which means irrespective of whether a wagon can carry 65 tonnes or not, in the book of Railways, there will be a record of 65 tonnes. There are reasons to believe that the actual loadability is often much less than the minimum chargeable weight. For example, a Box N cannot carry more than 58 tonnes of coal and the volume is much less in case of certain other commodities, for example, coke.

Acquiring wagons

The Budget proposes to acquire 20,000 wagons in 2008-09, a clear 100 per cent jump in the acquisition programme finalised for the current fiscal (2007-08) and, more important, the bulk of the new wagons to be acquired next year will be high capacity, special purpose freight cars. But then manufacturing such cars is not everybody’s cup of tea. Except some , there are not many wagon manufacturers geared to produce these new types of freight wagons.

The acquisition of the wagons could be speeded up if the Railways expedites the supply of some of the components that go into the manufacture of rakes. Which means the bottlenecks at the component supply level haveto be removed. Otherwise, the acquisition programme may go haywire. It might be interesting to note how many of the wagons programmed to acquire in a previous year were actually delivered to the Railways in that year.

High capacity wagons

There have been talks of 25-tonne axle load wagons, even 30-tonne axle load wagons presumably for deployment on the proposed dedicated freight corridor. However, at least for the past 15 years, the Railways has been struggling to introduce 25-tonne axle wagons with limited success so far. These wagons have so far been introduced only on two virtually captive routes on an experimental basis. This is presumably because it is not enough to introduce the high capacity wagons only; unless the line capacity, the locomotives and other facilities too are strengthened at the same time, the desired results will not be obtained.

Viability of port connectivity

It is good to know that issues such as port connectivity and doubling of lines will receive a good deal of attention. But then one couldn’t be sure of the outcome of such an initiative if the issue is left to Rail Vikas Nigam Ltd to handle. There are instances where the port connectivity and doubling projects have made little progress because RVNL, the implementing agency, is not convinced of their viability. The real problems facing the Railways, such as an acute congestion on certain busy freight routes and chronic shortage of locomotives, have not been addressed in the Budget.

Freight corridor project

The western corridor of the proposed Dedicated Freight Corridor project is already a sanctioned project though with little progress in implementation so far. One interesting announcement in Tuesday’s Budget is that the eastern corridor will be extended from Sonnagar in Bihar to Dankuni in West Bengal.

Mr Lalu Prasad proposes to upgrade infrastructure at an estimated investment of Rs 75,000 crore in the next seven years. Where is the money going to come from? If the Railways wants bigger private participation, it will perhaps have to take a re-look at its present public-private partnership model. These days, money may not be a problem. Correct policies to attract private investments are needed. Sadly, the Rail Budget lacks such policy initiatives.

More Stories on : Railway Budget | Insight

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page