Opinion: Delaying private entry in Indian Railways may not be a good idea

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Updated: August 18, 2015 9:36:17 AM

The Bibek Debroy panel’s recommendation of allowing the private companies to run passenger trains can’t take off till Indian Railways puts its house in order in terms of ensuring adequate infrastructure, facilities and management.

Indian RailwaysIndian Railways needs to first focus on running its own trains efficiently and then look at the possibility of allowing private players to run passenger trains. (Photo: PTI)

serious frauds investigation officeThe Bibek Debroy panel’s recommendation of allowing the private companies to run passenger trains can’t take off till Indian Railways puts its house in order in terms of ensuring adequate infrastructure, facilities and management.

Of course, the suggestion is under consideration, but the current thought process in the Ministry of Railways is that the first priority for the government is to improve the existing systems for running its own trains efficiently because unless that happens, why should a private player be interested in running a train.

There can’t be a situation where the trains run by the railways would be running the way they are at present and the government will be able to ensure the guarantee and safety mechanism that would be required for the private players to run their trains as they would not want to run trains to incur losses.

According to the latest review by the Ministry of Railways, 65% trains are passenger trains and they are yielding less than 30% of revenue; and rest 35% are freight trains giving 70% of the revenue and yet they receive lowest priority in train running. Then, 65% of the sections on High Density Network is already saturated and 492 out of 1219 sections (40%) are running at more than 100% capacity. The state of congestion can be gathered from the fact that 18% of the Indian Railways network are carrying 56% traffic.

So, the plan for now is to first focus on correcting the imbalances in the next five years, so that private players could be genuinely interested in running trains as a good business proposition.

While there is no doubt that the government is doing well by focussing on improving the functioning of the Indian Railways, it must remember that the private entry in sectors like telecom and civil aviation completely changed the consumer experience and growth scenario helping all the stakeholders by bringing in competition. Delaying this in the railways might not be a good idea.

How India runs its trains
— 65% trains are passenger trains yielding less than 30% of revenue
— 35% are freight trains getting lowest priority but giving 70% revenue
— 65% sections on High Density Network are already saturated
— 492 out of 1219 sections (40%) are running at more than 100% capacity
— 18% network is carrying 56% traffic.

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