The financial year 2017-18 was relatively better for the Indian Railways in terms of traffic and earnings compared with previous years. Some of the initiatives taken earlier last year have started to show results and are expected to boost receipts in the current year.
The financial year 2017-18 was relatively better for the Indian Railways in terms of traffic and earnings compared with previous years. Some of the initiatives taken earlier last year have started to show results and are expected to boost receipts in the current year. In an interview with Saurabh Kumar, Mohammad Jamshed, member-traffic, Railway Board, talks about the road map for 2018-19 and beyond. Edited excerpts:
What were the key factors that helped you achieve freight loading growth in in 2017-18?
Indian Railways achieved the highest-ever originating freight loading of 1,161.66 MT (million tonne), registering an increase of 52.87 MT (4.77%) compared with last year. The incremental loading is also the highest since 2010-11.
Almost all commodities have witnessed impressive growth over last year. We achieved the best-ever loading of coal at 555.23 MT, apart from pig iron and steel (53.18 MT), cement (54.31 MT), container (54.31 MT) and other goods (85.73 MT) in 2017-18. The annual growth in iron and steel, cement and container loading was the highest ever in the last eight years.
Also, railways achieved 658,020 million NTKM (net tonne kilometre) in 2017-18, registering a healthy growth of 6.11% and the average lead has gone up to 566 km, an increase of 7 km or 1.25% over last year.
What helped NTKMs and leads which had been going down in the last two years?
This reversal is the result of various policy initiatives to improve the lead of loading, incentives for loading in empty flow direction, rationalisation of distance slab above 1,500 km to 3500 km, rationalisation of coal tariff, promoting loading of bagged consignment in BOXN wagons. For instance, we have transported 20.69 MT traffic and earned Rs 1,277.12 crore under liberalised automatic freight rebate scheme in empty flow direction during 2017-18 which is around 208% higher both in loading and earnings terms compared with last year. Under the scheme of discount for loading of bagged consignment in open and flat wagons, loading increased from 40.91 MT to 46.09 MT and earnings from Rs 3,433.88 crore to Rs 3,955.01 crore during FY 2017-18 compared with the previous year.
What other measures worked?
Some of the other notable initiatives which worked include long-term tariff contracts, concessional tariff structure for double stack containers, withdrawal of dual freight policy for export of iron ore, opening up of railway terminals for container handling, allowing mini rake loading, withdrawal of port congestion charges, concessional station to station rates, and rationalised classification of commodities, among others. Though it is difficult to assess the impact of each initiative.
What are plans for future growth in the freight segment?
The NITI Aayog has set an ambitious target of achieving 1,900 MT of loading by 2022 and increasing the market share of railways in freight transportation to 40%. In this direction, our emphasis would be to further rationalise freight tariff, promote private investment in development of freight terminals, diversifying into new areas such as transportation of fruits and vegetable, containerised transportation, parcel cargo, e-commerce, among others.
Apart from various policy reforms, priority is accorded to capacity augmentation works such as doubling, third and fourth lines and DFCs (dedicated freight corridors) to create adequate capacity. This additional capacity cannot be utilised without commensurate number of wagons and locomotives. Procurement of around 18,000 wagons is already under process and indent for another 22,000 wagons has been placed for procurement.
Two locomotive factories are being set up – in Marhaura for diesel locomotives and in Madhepura for electric locomotives — to manufacture high horsepower locomotives to meet the demand. DFCs, which are expected to commence operations by 2019, would be the game changer for transportation of coal, container and other commodities. Containerised traffic, which is already growing at a double-digit rate, will prove to be boon for logistics ecosystem of the country. With these developments taking place, railways is certainly at the cusp of logistics revolution.