Getting the railways back on the right track -- The challenge of the millennium

by M N Prasad

This article was originally published by the Indian Steam Railway Society (ISRS) in its newsletter, and is reproduced here by permission, which is gratefully acknowledged. Copyright for the material here rests with the ISRS and the author(s) of the article. The ISRS is the premier organization in India engaged in preservation and efforts to promote awareness of the country's railway heritage.

This article originally appeared in the ISRS Newsletter No. 6, Summer 2001.

In 1985, with 15 years to go for dawn of the new millennium, IR had framed a Corporate Plan of its own, for the total development of the system, to be achieved during the period 1985-2000. It was, in fact, the perspective plan on which the three 5-year Plans from VII to IX were to be based.

The Corporate Mission for IR, as spelt out in the Corporate Plan document, was "to be modern railway system with sufficient capacity to meet the country's transport needs, both for passenger and freight traffic, based on an optimum inter-modal mix, and to provide this transportation at the least cost to the society, while maintaining the financial viability of the system". It was, indeed, a beautiful definition, in consonance with IR's traditional role as the life-line of the Nation. It was something which, if faithfully pursued, would have helped the Railways to serve the country well in the new millennium.

Unfortunately, the entire planning of IR, both for network development and for capacity augmentation, as envisaged,originally for the VIII and IX Plans happened to undergo some drastic changes, consequent on the successive changes in the Government at the Centre from 1991 onwards. As a result, the dawn of the new millennium has found IR relatively under-equipped to fulfil its legitimate role in the overall transport scenario of the country. The concept of sufficiency of capacity, optimality of inter-modal split, least cost to society and financial viability of the system, all seem to have been compromised as a result of the changes in policy and priorities of the political leadership.

This article attempts to focus attention on the growing capacity saturation of our railway system, for want of need-based inputs in recent years, and the steps to be taken to remedy the situation. It also stresses the importance of adopting an integrated approach to transport planning, based on an optimal split between rail and road, to achieve the utmost economy in petroleum products.

Compared to roads, the railways are 4.5 times more energy-efficient in the case of freight traffic and twice as energy-efficient in the case of passenger traffic. However, the railways are at a disadvantage in regard to: (a) Inability to provide door-to-door services; and (b) Public funding needed for the entire system and its operation, not merely for the infrastructure, as in roads.

Railways are ideally suited for medium to long-distance movement of passengers and goods, as well as for shorter distances where the quantum of traffic is too large to moved by road.

In view of the foregoing, it is now well recognised that planning of railway development should not be done in isolation, but be dovetailed with that of other modes of transport, so as to achieve an optimal solution that is most cost-effective.

Traditionallly, the bulk of domestic traffic is shared between road and rail. Over the past 50 years the Railways' share of passengers traffic has come down from 75% to around 20% and that of goods from 88% to about 36%. This declining trend can be attributed to: (a) Roads being more readily accessible to people along the route; (b) Capacity limitations being more specific on the railways.

The country's transport infrastructures, both rail and road, are grossly inadequate of cope with growing needs of traffic. This situation has arisen mainly due to the insufficiency of plan allocations during the past 30 years. In the first three 5-year Plans, the allocation for the Transport sector had averaged 23% of the total Plan outly; but it dropped to 13.8% (average) during the next six Plan periods. The railway's share for these two periods were 14% and 6.1%, respectively. The reduction was too drastic.

A fair idea of capacity saturation of the Railways can be had from the fact that, over the 48 year period of planned development form 1951 to 1999, rail-borne freight traffic (net t-km) has increased 6.44 times and passenger traffic ( 5.36 times. But the increases in route length and total running track length were only 17% and 37%, respectively. Even in regard to rolling stock, the wagon capacity has grown only 2.56 times, the number of passenger coaches 2.29 times and the total tractive effort of the locomotive fleet 2.24 times, during the same period. This was achieved by more efficient use of the available resources, including staff, whose strength increased only 1.73 times. By around 1990, a stage had already been reached when any further increase in output would require commensurate additional inputs.

IRs Corporate Plan (1985-2000) had envisaged a 100% growth in freight traffic output during the 15 year period. The original draft for the VIII Plan, prepared in 1989, had proposed a stepping up of the annual growth rate of freight traffic to 5%, as against the average of 3.8% achieved during the period 1971-91. This, incidentally, would have prevented further decline in the Railways' share of the total traffic and thus helped save considerable foreign exchange on petroleum.

Unfortunately, all these plans suffered a serious setback from 1991 onwards, consequent on an overnight shift in investment policy and priorities, from need based development aimed at capacity augmentation on economic considerations, to certain grandiose and populist schemes aimed at promoting the political interests of those in power for the time being. These included the over-ambitious scheme of wholesale gauge conversion (or the so-called Project Unigauge), in stark contrast to the earlier policy of selective and need-based conversions. Overriding priority for this scheme from 1992 onwards has resulted in a drastic slowing down of real capacity augmentation, both infrastructure and rolling stock. Side by side, several other unproductive schemes, like unremunerative new lines, redundant creation of several new railway Zones (a most retrograde step in these days of IT revolution), etc. have been launched by the successive governments, in utter disregard of the corporate mission of the Railways.

It had been a long established tradition, especially in the post-Nehru era, for Railway Ministers to do some special favours to their respective States and constituencies. But it was in the post 1991 period that the Railways Ministers started playing about with matters of policy and organisation, causing irreparable damage to the system. They have also gone to the extent of ignoring the sane advice given by the Parliament's own Standing Committee against the manner in which Gauge Conversions and New Zones' formation were being progressed without proper justification.

The aforesaid aberrations in IRs investment policies during the past 9 years have led to the following adverse fall-outs:

  1. The average annual growth rate of freight output,which was to have been stepped up from 3.8% to 5%, has dropped to a never-before low of 2.2%. The excess diversion of freight from rail to road on this account during the 8 year period 1991-99 is estimated to have resulted in wasteful extra consumption of petroleum (HSD) to the tune of 3 million tonnes, besides adding to the congestion on roads.
  2. The average annual growth of passenger traffic has dropped form 4.6% to 3.2%. This again has resulted in extra spill-over to the roads.
  3. Reduced production of passenger coaches, coupled with diversion of sizeable number of coaches and locomotives to replace MG trains on newly gauge-converted sections, has worsened the conditions of travel for the common man.
  4. Track renewals have gone into heavy arrears, resulting in increased incidence of rail failures.
  5. Consequent on slowing down of traffic growth, IR has had to hike the fares and freight rates very substantially, in order balance the yearly budget.
  6. In the last few years, the Railway Ministers have been resorting to over optimistic projections of revenue earnings, which ultimately results in drastic cuts in Plan expenditure, because of the shortfall in earnings.
  7. In the 2000-01 Budget, the Railways have actually gone into the red with default of Rs. 1500 Crore in dividend payment to the general exchequer. This is indicative of the dire financial straits in IR has been landed.

IR today has the dubious distinction of being the only major railway system in the world where major decisions on investment policy and organisation are taken by politicians according to their whims and fancies. This has, perhaps, been helped by the fact that railway projects had always been kept out of the purview of the Public Investment Board, because of the Railway Ministry being professionally managed with its own finance headed by Financial Commissioner who is accountable to the Finance Minister as well. It needs to be examined how such a system hasfailed so miserably in the post 1991 period.

The future of railway development appears to be bleak, as things stand, unless some damage control measures are taken immediately to arrest and,if possible, reverse the downhill trends. These will necessarily have to include the following:

  1. A review of the ongoing gauge conversion works to see how best they can be tapered down, so as to reduce the yearly spending thereon to affordable limits.
  2. Unremunerative new lines projects should be frozen.
  3. The seven new railway Zones should be shelved, except the NW Zone at Jaipur which is justifiable on kilometrage basis.
  4. Production of coaches and locomotives to be stepped up to utilise the available capacity in full.
  5. There should be no further introduction of fully air-conditioned trains. For every air-conditioned coach saved, two non a/c coaches can be produced with the same money which will benefit the common man.
  6. More powerful engines should be used to haul goods trains so that the average speed of through goods trains may equal that of mail/exp. Trains. This will enable better utilistion of the wagon fleet and locos and reduce the turn-round time.
  7. There should be major thrust for 'containerisation' of domestic freight, with terminals spread all over the country, so as to derive the dual benefits of long hauls by rail and door-to-door service to the customers at both ends through short by road. This will help win back some of the traffic presently moving by road.
  8. No new railway project should be sanctioned (except strategic ones) unless found justified economically.

The author is former Chairman Railway Board and ex-officio Principal Secretary, Railway Board, Ministry of Railways, Govt. of India.