Indian railways: Time to open up fast

Jul 07 2014, 08:21 IST
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SummaryThe govt should make budgetary provisions to grant incentives and concessions, including substantial VGF, for private rail networks

For far too long, Indian Railways has been operated as a system in which the central government has been the rule-maker, the service provider and the ultimate adjudicator. Hitherto, there has been hardly any role in it for any one else, be it the provincial governments or private enterprise, whether domestic or foreign. As is commonly the attitude of a monopolist, on grounds of turf-protection, all past endeavours to elicit meaningful outside association have been virtually stonewalled by the rail policymakers in New Delhi who have been too sceptical about the need for it and have evolved ambivalent frameworks.

The last 67 years since 1947 have seen the rail route length grow annually by a meagre 160 km compared to 550 km per year in the 94 years preceding it (from 1853 onwards) when the first rail link was developed in India. As much as 80% of the 65,000 km network-length came about before Independence and only 20% thereafter. With cost-to-revenue ratio of persistently higher than 90%, the departmentally run rail system has, for want of investible surplus, kept its capital-spend at minimal levels and has hardly been investing in its expansion, modernisation or on making rail travel safe. Most of the heavily used rolling stock and other capital stock is being flogged year after year without its periodic replacement or upgradation for carrying over 20 million passengers and about 3 million tonnes of cargo a day.

Operational parameters, particularly safety and service, have consequently been adversely impacted. As many as 800 promised projects included in various Rail Budgets are languishing without being completed for longer than one can remember. The necessity of tripling the investment in railways, from the current $9 billion a year to 1.1% of GDP, has been emphasised by many experts and recently by the National Transport Development Policy Committee. A couple of years ago, the Kakodkar Committee had urged accepting a plan to spend about R10 lakh crore only on improving railway safety.

In this environment, the oft-mentioned need to invest in developing a diamond quadrilateral of high-speed railway network of 6,500 km, linking the four metropolitan cities at a cost of about R150-180 crore per km, and a dedicated freight corridor of almost equal length at R50-60 crore per km, prima facie, looks unconvincing. But apart from having big-ticket projects such as these, to kick-start the revival of the economy, there is no denying that amenities are

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