Union Budget 2017 and Indian Railways: Rail Ministry must lay down timeframe for implementing safety works

New Delhi | Published: February 9, 2017 4:44:04 AM

A lean structure with delegation of powers is one mega reform that needs to gather momentum so that the railways can fully utilise funds at its disposal and create a vibrant network that is high on safety, convenience and comfort.

The government realises that the Indian Railways is in urgent need for upgradation and modernisation with several routes running well above capacity and hence, the budget rightfully did not have any populist announcements including launch of new trains. (Reuters)The government realises that the Indian Railways is in urgent need for upgradation and modernisation with several routes running well above capacity and hence, the budget rightfully did not have any populist announcements including launch of new trains. (Reuters)

The first consolidated Union Budget was crisp and concise on the allocations and priority areas for Indian Railways. With the government doing away with the 92 year practice of a separate annual railway budget, finance ministers Arun Jaitley was firmly focused on passenger safety, capital and development works for modernisation, cleanliness, and finance & accounting reforms to overhaul the massive network. The government realises that the Indian Railways is in urgent need for upgradation and modernisation with several routes running well above capacity and hence, the budget rightfully did not have any populist announcements including launch of new trains. The government also recognises that investment in Railway sector has a huge multiplier effect, both in terms of enhancing GDP as well as in job creation. The budget endorses this understanding of the importance of the rail sector.

The budget announced highest ever allocation of R1.31 lakh crore for capex and development expenditure for FY18, compared to R1.21 lakh crore a year ago. It also set a target of commissioning 3,500 km of new railway lines, compared with 2,800 km last year. The Budget promised to move to accrual-based financial statements by March 2019, as part of accounting reforms and aimed to marginally improve the railways’ operating ratio from 94.9% in FY17 to 94.57% in FY18.

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A series of accidents in the recent past, that caused loss of both life and property, have finally led to the creation of railway safety fund (Rashtriya Rail Sanraksha Kosh) that was hanging fire for nearly two decades. If monitored well and implemented judiciously, the fund—which will have a corpus of

R1 lakh crore over a period of five years—will go a long way in replacing rickety tracks, old coaches, and outdated signalling and other systems with new structures and latest technology.

The railways must speed up the process of replacing ICF coaches by LHB coaches in all passenger trains. Unlike ICF coaches, LHB coaches are anti-telescopic and do not turn turtle in case of derailment. LHB coaches also have disc brakes, and thus need shorter distance to stop. With railways looking to increase speed of trains as it adds new tracks, LHB coaches with average speed of 160 km per hour will be better suited than ICF coaches. The railways also needs early introduction of train collision avoidance system and better warning systems for timely detection of flaws and break in rail tracks.

For a service that carries millions of people every single day, passenger safety is paramount. As stated in the budget, it is critical that the ministry of railways lays down clear guidelines and timelines for implementing various safety works that will be financed from this fund. The Budget’s promise to eliminate all unmanned level crossings on Broad Gauge lines by 2020 is another critical measure to enhance overall safety.

The budget also laid down plans for a new Metro Policy for urban centres that will focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software. To achieve this objective, the government plans a new Metro Rail Act by rationalising the existing laws for facilitating greater private participation and investment in metro projects across the country. Given that several more cities are seeking to implement metro systems, a comprehensive and uniform policy that pushes standardisation and promotes “Make in India” by incentivising procurement from companies that have invested in India is indeed the need of the hour. Such a policy that promotes local design and manufacturing will help reduce costs, create jobs and give a fillip to ancillary industries.

With freight loading under pressure amid stiff competition from road transport, the Budget has nudged the railways to implement end-to-end integrated transport solutions for select commodities through partnership with 18 logistics players. These logistics companies will provide railways both front and back end connectivity. Further, rolling stocks will be customised to transport perishable goods, especially agricultural products. This step will open up new revenue generating avenues for railways.

Among other notable measures, the Budget did away with service charge on e-tickets booked through IRCTC to promote digital transactions, assured bio-toilets in all coaches by 2019 for cleaner tracks, promised to light up 7,000 railway stations with solar power in the medium term, and announced plans to award at least 25 stations for redevelopment in the next financial year.

It is evident that the railways is steadily beginning to untangle the maze of command and control structures to cut down on the time taken to implement and execute various projects. A lean structure with delegation of powers is one mega reform that needs to gather momentum so that the railways can fully utilise funds at its disposal and create a vibrant network that is high on safety, convenience and comfort.

In summary, while the Budget is pro-development, it is absolutely imperative that we focus on improving capacity of various public authorities to implements projects on time and within budget of individual ministries.

The author, Bharat Salhotra, is managing director, Alstom India and South Asia.

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