Incessant Maoist violence is threatening to take a direct toll on the economy. The Indian Railways is considering a proposal to suspend night operations of trains in five Naxal-infested states of Jharkhand, Chhattisgarh, Orissa, Bihar and West Bengal till the situation improves perceptibly. The proposal is being discussed in the light of the latest Naxalite attack on a train in West Bengal?s West Midnapore district, which killed 76 persons and injured 200. The early morning attack is the latest in a series of massive casualties inflicted by the insurgents.
?We are discussing a proposal for suspending railway operations during night time in Orissa, Bihar, West Bengal, Jharkhand and Chhattisgarh. A decision will be taken shortly,? Railways? member (traffic) Vivek Sahai said.
If the Railways stops night operations, scores of industries supplying and using coal, iron ore and steel will be hit hard. These three commodities account for about 60% of the total freight volume handled by the Railways, and the bulk of these are transported across the five Naxal-affected states.
The Railways? plan would also affect the big-ticket steel plants proposed by Posco, Tata Steel and ArcelorMittal in Orissa and Jharkhand.
The projects, entailing aggregate investments of Rs 1,70,000 crore, are already in limbo for the last few years due to delays in land acquisition and problems with environmental clearances. While the Posco project got the forest clearance in December last year, the Korean company is still facing serious problems in land acquisition.
Curtailment of railway operations in the mineral-rich states would also adversely affect the functioning of steel plants which have limited or no captive resources of the mineral. It would also curb iron ore exports. West Midnapore incident was the 32nd case of Naxal violence in 2010, of which 21 have been bomb blasts. Last year, railway properties were targeted 58 times, including 22 bomb blasts.
However, some railway officials were sceptical of the move, saying it is unusual of the Railways to stop the running of trains. ?Railways may be acting in panic. If we do so, we are showing the detractors that we cannot handle our operations. Instead, we should continue working as usual. The matter has to be discussed in detail,? a senior official told FE requesting anonymity.
?The Railways seems to be concerned about security, but it should handle the issue at the security level, rather than stopping operations. The industry should not be taken for a ride, especially when the transportation of commodities is already facing hindrance due to inadequate infrastructure. This is definitely not a positive measure,? CARE Ratings? managing director DR Dogra told FE.
The five states are hubs for mining coal and iron ore and production of steel. Coal India, which produced 87% of India?s total coal output of 531 million tonne in 2009-10, has its mines located in the Naxal-affected areas of the country. SAIL and Tata Steel too have plants in these states. In the case of iron ore, these areas contribute nearly 900 million tonne of the mineral used by steelmakers and other industries.
Railways? move is also likely to impact its earnings from freight and passenger transport. The national transporter registered a 7% rise in freight volume in 2009-10 to 888 million tonne, earning close to Rs 58,000 crore. More than 58% of the total freight revenue came from transporting coal, iron ore and steel. The Railways aims at transporting 944 million tonne of commodities in 2010-11.