FE Editorial: Slow train or fast train?

While the Railways needs at least R14 lakh crore of funds over the decade for modernisation, it has no plausible way to access these funds. Indeed, things have got so bad, the Railways is likely to lose R25,000 crore on R36,000 crore of budgeted passenger revenues this year. As a result, it overcharges on freight—the passenger-fare-to-freight earnings ratio has fallen from 0.31 in FY01 to 0.25 in FY13 (this ratio is 1.3:1 for China)—and then loses on freight revenues since this makes freight rates among the most expensive in the world. In FY12, when nominal GDP grew 15%, freight traffic grew just 6%. This year may not be much better.

Nor is it just a matter of the money, important as that is. According to the Kakodkar panel on Railway safety, around a fifth of safety-related posts in the Railways are vacant; the 52 kg/m rail tracks used, the panel says, are “not prudent to use” and around 43,000 ICF coaches used “are no more safe at the present operational speeds”. In a situation like this, the only feasible solution lies in dramatically hiking the involvement of the private sector—R2.3 lakh crore is to be mobilised through PPP in the current Plan period—but there has been no progress on this so far. While nothing has been heard of the grand plan to

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