Op-Ed Articles by R C Acharya - Part 2
R C Acharya
This is a selection of op-ed pieces by Mr R C Acharya, former Member (Mechanical), Railway Board
Track II Execution
(This article appeared in The Financial Express, 2011-05-04 and is reproduced here by permission of the author.)
With the Indian Railway's famous turnaround story under Lalu Yadav having been totally discredited and no signs of any increase in passenger tariff to boost its earnings in the foreseeable future, the behemoth is back to borrowing to keep its development plans on track.
Once again the Japanese International Cooperation Agency (JICA), which helped kick start the world class Delhi Metro Rail Corporation almost a decade back, has come to the aid of Railways (IR). However, financing one of the most ambitious projects ever taken up by IR may be cheap at about 1% interest and most generous repayment terms, but it won't come without strings tied. Not only 30% of the material purchases has to be from Japan, for the balance 70% the lead contractor has to be Japanese, though it may have Indian partners. This ensures not only long-term business opportunity for the Japanese industries but also a captive market for Japan's locomotives, rolling stock, signalling equipment, and the construction industry in general.
While the 1,278km-long Eastern leg will take care of the burgeoning coal traffic from the eastern coalfields to the scores of thermal plants in Bihar, UP, Haryana and Punjab, the 1,515km Western corridor promises some exciting possibilities for new ventures that could take birth in the proposed Delhi-Mumbai Industrial Corridor (DMIC), a 150km-wide belt all along the corridor to make full use of the rail connectivity.
To speed up things, the Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) has set up no less than seven chief project managers (CPMs ) at Mumbai, Surat, Vadodara, Ahmedabad, Ajmer, Jaipur, and Dadri for the short but highly vital Dadri-Rewari link.
Of these, the largest one, viz., Ajmer with 362km, has also been the most prompt with almost 95% of the land acquired, a key element in the entire R80,000-crore project of the DFCCIL. This has been thanks mainly to the new Special Railway Projects Act of 2008, which replaces certain provisions of the earlier Railway Act of 1886!
Amongst other things, awards under the new Act cannot be challenged in a court of law. However, the complainant can go for arbitration. Under section 20A of the Act of 2008, a notification is issued by the district authorities and after due consideration of the objections filed an award is made under section 20E, after which the land is taken over. The whole process is normally completed in one year as against three years or more for acquisitions under the earlier system, if in the mean time the matter did not end up in a court of law.
The DFCCIL is also actively pursuing construction of 'road over-bridges' to eliminate level crossings wherever its tracks are close and parallel to the existing alignments, thus killing two birds with one stone. As a result the district administration is only too happy to help the DCCIL to speed up the process with various permissions and sanctions.
Perhaps one of the most desirable aspects of the project is that it is no longer subject to the whims and fancies of the political master who occupies the august chair in the corner room of Rail Bhavan.
The new corridors being meant purely for freight has stations spaced 50 kilometres apart, with junction arrangement no closer than 250km to 300km. With a very strict regimen of on-site inspections and prior approval of all plans, JICA will be looking for quick and steady returns on its investments, and not keen on scoring brownie points from socially desirable ventures.
However this may still not stop a determined minister from bulldozing his or her way into the history books by ordering running another set of 'Garib raths', 'Sampark Kranti express' or 'Durontos' on tracks specifically meant to carry freight!
With a tally of over 11,000 passenger trains on the 64,000km of track already crowding out 6,000 freight trains, only a person with a long-term vision would be able to put a stop to any further degradation of the system.
However, the DFCCIL project also promises to usher in an era of new technologies in the field of mechanised track laying, maintenance, locomotives, rolling stock, signalling, and special types of wagons capable of mechanised loading and discharge. and JICA is unlikely to tolerate any political interference.
And that is definitely something to look forward to.
Promises to Keep...
(This article appeared in The Financial Express, 2011-02-26 and is reproduced here by permission of the author.)
In her more than an hour-long spiel, Mamata Banerjee's 47-page budget speech had only 7 lines for one of the most important initiatives by her ministry -- the dedicated freight corridor!
Estimated to cost over Rs 60,000 crore, for the dedicated freight corridor she has apparently opted for Japanese International Cooperation Agency, instead of asking for one-time grant from the central exchequer. Reportedly, the loan agreement has been signed and the consultants -- Nippon Koei in the lead with Parsons Brinckerhoff Japan and others -- are also in place.
According to Mamata, the good news is that the Dedicated Freight Corridor Corporation of India has been able to reduce the land needed -- a highly vexing issue -- by realigning the route, utilising 12,000 acres from Railways' own land bank, thereby reducing the cost by Rs 300 crore. However, the bad news is that the earlier target of 2013 set by the previous railway minister Lalu Yadav has been pushed to 2016, that is, if all goes well.
However, funding for the 1,300km-long eastern leg has yet to get the World Bank's nod, which is reportedly going through it with a fine tooth comb. In the meantime, Mamata has gone ahead, commencing work from the eastern end, viz., Dankuni in West Bengal.
Every railway minister finds it imperative to show his or her magnanimity by promising dozens of new projects on the floor of the Lok Sabha and this year, too, Mamata has not failed her fans. Some of these may be to ensure a steady growth in Railways' capability to move higher levels of traffic, but most of these are to meet people's aspirations; in other words, are socially desirable.
For the proposed Rs 57,630 crore annual plan for 2011-12, she has been able to persuade the mandarins of finance ministry to cough up a whopping Rs 20,000 crore as budgetary support, and hopes to garner Rs 1,041 crore from diesel cess, Rs 14,219 crore from internal resources and Rs 20,594 crore as market borrowings from the Indian Railways Finance Corporation (IRFC).
She hopes to raise Rs 10,000 crore through tax-free bonds next year, again courtesy IRFC. However, the possibility of her raising Rs 1,776 crore through public-private partnership and wagon investment scheme on the basis of past experience is somewhat remote.
She was quick to admit that her promise of completing 1,000km of new lines every year may not fructify and Railways may end up with only 700km for 2010-11. Rs 3,406 crore for doubling and Rs 2,470 crore for gauge conversion has been earmarked for 2011-12, while Rs 13,820 crore for new rolling stock should meet the ever growing demand for wagons.
However, Mamata's promise of running double-stack containers from Gujarat ports to the ICD terminal at Gurgaon may come a cropper -- if and when her proposal to electrify the Ahmedabad-Palanpur-Phulera-Ringus-Rewari-Delhi, including Kandla/Mundra Port-Gandhidham-Bhildi-Palanpur materialises after the feasibility study for these sections has been completed -- putting at risk the survival of a highly productive container transport system on this route.
In her quest for making a mark in the Northeast sector, she has created a non-lapsable fund for undertaking all projects in that region, promising rail connectivity to all state capitals, except Sikkim, within the next 7 years. Of course, the funds at her disposal may be in the process of being worked out, but given the hilly terrain and the difficulty in executing civil works in that area, it is rather a tall order. But then 7 years is long way and she may not be there to answer!
As a part of the development of the Northeast, she has also proposed setting up a diesel locomotive centre (basically a diesel loco homing depot) at Manipur, when it gets connected by rail.
According to Mamata, one of the most vital projects in J&K -- railway tunnel between Banihal and Qazigund -- is expected to be completed this year. In the meantime, she proposes to give the people of J&K something to look forward to -- a brand new factory to build bridges so that it may come in handy for the scores of bridges needed to be built for the hilly terrain, and a state-of-the-art Institute for Tunnel and Bridge Engineering at Jammu. Perhaps the Banihal tunnel will serve as a model project study if and when it gets completed.
It's Raining New Trains!
(This article appeared in The Financial Express, 2011-02-23 and is reproduced here by permission of the author.)
While an apple a day may keep you healthy, wealthy and wise, a new train a week most certainly keeps Railways weak, poor and certainly not wise. Unfortunately, this has been the mantra of the railway ministers over the last two decades, and the trend does not seem close to abating any time in the near future!
In the process, over 2,500 new passenger trains, with extensions and increase in frequency etc. -- an average of 125 a year -- have been introduced, eating into valuable section capacity, leading to considerable slowdown in the through put of freight trains.
No politician worth his salt would ever miss an opportunity to gain valuable 'brownie points' by demanding and getting a new train introduced, serving his/her constituency or his/her home town, when there was an ever-obliging railway minister at hand. Visuals on any TV channel, of a politician or any other dignitary waving a green flag, setting a brand new train in motion, always makes for excellent publicity!
Arguably one of the most convenient and popular gimmicks available to the political masters of this 1.4 million strong behemoth, the captive production units -- viz., ICF (Integral Coach Factory) at Permabur near Chennai and RCF (Rail Coach Factory), between them churning out over 3,000 brand new coaches -- enable formation of rakes for the new trains at the drop of a hat. (Although all of them don't end up as new rakes, and some of these go towards replacement of over-aged and accidental ones.)
Added to this, DLW (Diesel Loco Works) at Varanasi, and CLW (Chittaranjan Loco Works) in West Bengal between them produce nearly 500 diesel and electric locomotives a year, providing the much-needed muscle power to haul these new trains at high speeds.
While the credit goes to late Madhavrao Scindia for conceiving and successfully introducing the concept of fast inter-city Shatabdi trains in the late 1980s, soon other railway ministers found the need to introduce their own brand of fast inter-city trains, starting with Nitish Kumar, who called them Sampark Kranti express trains, to highlight his brand of politics.
Not to be left behind, Lalu had his own version in Garib Rath and now Mamata has introduced Duronto, the point-to-point version of Rajdhani, all trying to leave a permanent mark of their concern for the millions of passengers. In her last budget speech, Mamata went a step further by announcing special services called Matribhoomi, Karmabhoomi, Janmabhoomi, and Bharat Tirth trains!
Unfortunately, in the process, the Railways ends up being a loser as with the dismally low fares, which have not seen a meaningful hike for last two decades, the passenger business is a major drain on its finances and continues to be cross-subsidised by freight earnings!
In order to make both ends meet, Railways has been forced to periodically tweak freight tariff upwards, much to the chagrin of the business community, which finds its long-term forecasts going awry.
Railways has already lost considerable market share to the road sector, dropping from about 40% half a century ago to less than 25% now, and is left carrying mostly captive commodities such as coal, limestone, bauxite, iron ore, foodgrains, etc, hoping to reach 944 million tonnes, the target proposed for the year ending March 31, 2011.
On the other hand, Chinese Railways, with just over 74,000km of network, marginally larger than Indian Railways' 64,000km, is already carrying over 2,700 million tonnes a year! The answer to this perhaps lies in the fact that although the passenger tariff is marginally higher, the number of passenger trains are much less and travel is restricted to once a year trip home.
Interestingly, in 2007, while Indian Railways registered 6,94,764 million passenger-km, while the Chinese Railways registered only 6,89,618 million passenger-km, even though the country's network is much larger and it is a record holder for the world's population at over 1.3 billion!
Of course, apart from almost the double the number of long distance passenger trains being run by Indian Railways, it is the comparative ease with which train tickets can be procured that makes all the difference, not to mention the rampant ticket-less travel in most parts of Bihar and UP.
Thanks to the world-class PRS (passenger reservation system), again introduced by Madhavrao Scindia in the late 1980's, the system has grown exponentially, enabling tickets for reserved accommodation for over a million passengers a day being issued from its 8,169 terminals at 2,193 locations (including those for unreserved accommodation) across the country.
Given the urge to travel and the ease with which it can be done with innumerable trains to choose from, no wonder India's teeming population is set to swamp the system. Now only if some one has the courage to hike the passenger tariff, turning a liability into an asset, and get the Railways' finances back into shape, to power its growth to handle higher levels of freight.
(This article appeared in The Financial Express, 2010-11-09 and is reproduced here by permission of the author.)
On September 27, 2006, the Prime Minister laid the foundation stone in Ludhiana, the starting point for the eastern sector of the multi-crore "Dedicated Freight Corridor" project. Earlier that year, Lalu Yadav announced, in his budget speech, the inclusion of a Rs 66,000 crore project, which would connect the four metros by a separate rail corridor. This was with a view to achieving a quantum jump in the railways' capacity to move freight and win a higher market share. The very next year, an SPV called the Dedicated Freight Corridor Corporation India Limited (DFCCIL) was set up to undertake the project, which Lalu Yadav had boasted would complete by 2013.
A few years down the line after the "turnaround" of the Indian Railways, when Lalu Yadav claimed to have earned billions, carefully chronicled by Sudhir Kumar, his Officer on Special Duty in a book entitled From Bankruptcy to Billions, he did not envisage a funds crunch.
However, DFCCIL is now busy parlaying with industrial bigwigs to take the much touted PPP route, especially for the Rs 8,500 crore Sonnagar-Dankuni section in the eastern sector, added by Mamtadi as soon as she took over the reigns of Rail Bhavan. The government is understood to be in advanced stages of discussions with the World Bank for funding a part of the 1,131km-long Ludhiana-Khurja-Kanpur-Mughalsarai section. Some progress has been made on the ground-construction of the Karwandiya-Ganjkhwaja section of the eastern corridor was inaugurated by Sonia Gandhi over a year ago.
However, land acquisition is the key to the project and during their inception more than 150 years ago, most of the railways had taken over substantial land ensuring the right of way for their track alignments, with enough room to accommodate four pairs of tracks. Hence, even though a route shorter by as much as 300km would have been feasible from Ludhiana, the northern most take-off point to Mumbai over the great Thar desert, an existing alignment of 1,483km from Delhi (Dadri/TKD)-Ajmer-Ahmedabad-Mumbai/Jawaharlal Nehru Port Trust was preferred, since over 90% of the land for an additional pair of tracks was already available.
Moreover a 150km-wide belt of industrial complexes had been simultaneously planned along this route, which would have immensely benefited from it and also offered substantial valuable export traffic to DFCCIL. The 1,806km-long eastern sector, however, did not offer the luxury of an entirely new alignment. Sticking to the existing Ludhiana-Delhi-(TKD-Dadri)-Kanpur-Mughalsarai-Dankuni was considered more cost-effective and involved very little new land acquisition. However, even this is turning out to be quite a herculean task, with vast tracts near major junctions already built up with authorised and unauthorised structures, mostly housing colonies.
The final location survey and alignment were completed for almost the entire section on the eastern and western DFCs, between Sonnagar and Ludhiana and Rewari and JNPT respectively, more than a year ago. Now the onerous task of land acquisition is being vigorously pursued. For this, no less than nine field units, each one under a chief project manager, have been created in Mumbai, Baroda, Ahmedabad, Ajmer and Jaipur on the western corridor, and Ludhiana, Kanpur, Allahabad and Kolkata on the eastern corridor. 11,535 hectares spread over 2,793km for both the corridors, are essential for its early completion. The project is spread over an area of about 4,295 hectares on the eastern, and about 7,240 hectares on the western sector.
By the end of 2008-09 notifications for land acquisition under Section 20A of Indian Railways (Amendment) Act, 2008 had been published for more than 2,300km spread over 9,000 hectares in Uttar Pradesh, Rajasthan, Gujarat, Bihar and Maharashtra. Notifications, this time under Section 20E of the same Act, have been issued for 179km, spread over about 476 hectares in Uttar Pradesh and Rajasthan. The latest rough estimates of land acquired is around 2,000 hectares or 20% of the total required.
A team of international consultants in the field of railway construction and general civil engineering consisting of Parsons (as the lead consultant), Brinkenhoff, Halcrow, Wilbur Smith and Lee Associates promises to guide the DFCCIL in negotiating various roadblocks in its path to a speedy completion of the multi-crore project. They will also aid the incorporation of state-of-the-art technology in the field of "heavy haul", which should give the Indian railways capability to move higher levels of freight a major boost. Wagons with higher axle load of 32.5 t against the current 22.5 t, 1,500 metre-long trains as against the current 686 metre, speeds of 100km/h, a 33% jump over the current 75km/h, the dedicated freight corridors promise to meet the railways' freight transport needs for the next 25 years, if not more.
A Tale of Two Cities
(This article appeared in The Financial Express, 2011-06-01 and is reproduced here by permission of the author.)
Delhi the babu capital of India teeming with rule-bound, risk-averse bureaucrats and Bengaluru the IT capital swarming with smart youngsters in high-profile MNCs, innovative, and ever eager to push the envelope suffer from the same problem traffic thrombosis!
However, the approach to solve their problem has been a study in contrast. Delhi Metro Rail Corporation (DMRC), within five years of beginning work, opened the first 8-km-long section of Shahdara-Tis Hazari, involving a 2-km bridge over the Yamuna river, in December 2002. That ushered a new era of fast efficient, cheap and above all pollution-free transport system in the National Capital Region (NCR).
Since then, over the next eight years it has steadily grown to an almost 200-km-long network carrying 1.5 million passengers and earning R3 crore a day. DMRC has since financed R500 crore for Phase-I expansion, and is now poised to finance another tranche of R1,500 crore for Phase-II from its internal resources. On April 24, 2011, the Delhi Metro has completed 100 months of operations.
All thanks to one man, E Sreedharan. He has been at the helm of DMRC from its inception. He has already finalised detailed planning for Phase-III, which would take the network to 295 km by 2015, in the process connecting the satellite townships of Gurgaon, Ghaziabad, Faridabad and Noida to NCR, and make it one of the fastest expanding metro networks in the world.
On the other hand the ambitious BMRCL (Bengaluru Metro Rail Corporation Ltd) also known as "Namma Metro" (mymetro, in Kannada), though set up a decade ago, got active only in 2006 with the start of Phase-I construction. It has already seen no less than four managing directors, all from the IAS, the last three having moved to greener pastures within a few years of file pushing.
The present MD, who has surprisingly stayed on for more than three years, is a BE in mechanical engineering and with a string of impressive post graduate qualifications. However, he is a true-blue bureaucrat, almost two decades serving Karnataka, but has not much of an experience to talk about for handling a multicrore transport system mega project.
A large team of foreign consultants has certainly been of help, but unfortunately, quite a few key decisions to be taken by the CEO would involve a deep understanding of the highly complicated and specialised methods of construction and operational technologies of a metro system.
Moreover, the team of civil, electrical and other engineers of BMRCL who are involved in overseeing and monitoring the design and progress is a heterogeneous mix, a few retired railway engineers, and a majority recruited from the market and various government departments. The latter hardly have any track record in execution of such a mega project, leave alone a specialised one such as the metro.
In contrast, Sreedharan not only brought to DMRC 35 years of experience -- of which last few years as head of civil engineering for Indian Railways, but also the vast expertise gained in completing a mega project of 720-km Konkan Railway involving hundreds of bridges and tunnels in one of the most difficult terrains of Western ghats, without any time or cost-overruns.
With him came a hand-picked dedicated team of over 70 young serving railway engineers of various disciplines with proven track record to work as a cohesive team in assisting him to oversee the design, tendering and execution, a highly critical input.
For the last five years, poor citizens of Bengaluru have suffered their roads being dug up all over for the Namma Metro. The two sections of BMRCL, the 6.7-km Baiyyappanahalli-MG Road, and the 10-km Swastik-Peenya, which were due for inauguration in April 2011, are nowhere near completion. Furthermore, they would remain as two stumps, which even if commissioned, are not likely to attract much ridership till they get interconnected at Majestic, when the underground tunnels are in place some time in July 2013, though the work is yet to commence.
Reportedly, BMRCL is losing Rs 5 million a day. With no signs of any revenue earnings for a long time to come, it could prove a very expensive venture.
Delivering on Promises Made
(This article appeared in The Financial Express, 2011-06-15 and is reproduced here by permission of the author.)
There is a new chief at Rail Bhavan, occupying the chair of minister for railways vacated by Mamata Banerjee, who has already taken charge at Writer's Building, Kolkata.
Born in Kanchrapara, West Bengal, in 1954, Mukul Roy was elected to the Rajya Sabha in April 2006, appointed as a permanent special invitee to the consultative committee for the ministry of railways and from May 2009 been minister of state in the shipping ministry before moving over to the railway ministry as minister of state, but under overall charge of the Prime Minister.
He is a political and social worker, been a staunch supporter of Banerjee and someone she can trust to carry forward her policies and, most importantly, the scores of new projects she has sanctioned for West Bengal before signing off as railway minister.
At last count, there were about 20 projects in West Bengal, big and small, which Mamata would like to see completed in double quick time to establish her credibility as someone who delivers on her promises. Costing over R430 crore, she would very much like to keep a close watch on the progress, and there is no better way than to get one of the trusted members of her team to pursue them in the railway ministry.
The years 1986 to 1989 too saw a minister of state, Madhavrao Scindia, occupying the corner room on the second floor of Rail Bhavan. This was the Rajiv Gandhi era, when young and dynamic ministers occupied key portfolios, and being a mere minister of state did not stop Scindia from making some trailblazing moves.
It was a watershed period for the Indian Railways for it chalked up some of the most significant and successful inputs for this organisation that employs 1.4 lakh people, and boasts of a world-class computerised reservation system that delivers at the click of a mouse almost a million tickets every day from its 8,200 terminals at nearly 2,300 locations on Indian Railways' 64,000km network around India.
Scores of superfast inter-city trains called Shatabdis made their debut connecting major metros, reaching city centres reliably and at a fraction of the cost of airlines. From the day one, Scindia set about getting to know the ropes. Soon he had got his bearings, came to know the strengths and weaknesses of this vast organisation and then set about being a superb, visionary and a highly pragmatic CEO of this behemoth.
Roy may not reach the benchmarks set by Scindia, but certainly would not like to let Banerjee down. His priority would undoubtedly be in leaving no stone unturned to get the projects in West Bengal off to a good start and, far more important, record a speedy completion.
With an eye on the West Bengal chief minister's chair, Banerjee had as early as 2009 ordered the 1,230km-long eastern leg of the Dedicated Freight Corridor (DFC) from Ludhiana in Punjab to Son Nagar in Bihar to be extended beyond, by another 576km, to reach Dankuni in West Bengal, where she wants to set up a new electric loco facility.
Plans for a new coach factory at Singur are also on the cards. It was initially proposed by the erstwhile CPI(M) government in West Bengal, which had formulated the plan for the plant if and when it got back the land from the aborted Tatar Motors initiative.
A diesel multiple unit plant, a depot as a joint venture (JV) or a public-private partnership (PPP), a factory at Sankrail and a centre for excellence in wagon prototyping at the Kharagpur workshop of South Eastern Railway were among other projects Banerjee announced in the last Rail Budget speech.
One of the major projects will be a brand new railway axle factory at New Jalpaiguri, again through the JV/PP route, for which Rashtriya Ispat Nigam Ltd has been shortlisted. Negotiations are at an advanced stage, with land being made available by the railways. A heavy axle load wagon POH (periodic overhaul) facility for the eastern leg of the DFC at Dankuni and a coach mid-life rehabilitation workshop at Anara in Adra Division of South Eastern Railway are some of the other initiatives promised by Banerjee for the people of West Bengal to generate new jobs.
A little worrisome for wagon builders -- a large number of them are based in Bengal -- could be Banerjee's proposal to set up no less than five state-of-the-art new wagon manufacturing facilities in Secunderabad, Burdwan, Kalahandi, Guwahati and Haldia, two of which will undoubtedly bring cheer to West Bengal.
However, with the present funds constraints and not much hope of any increase in passenger rail tariff in the near future, Roy would have a hard task ahead to get all these projects off the ground, leave alone complete them in the foreseeable future.
Unless, of course, the finance minister steps in with a massive one-time grant for infrastructure projects in West Bengal, which could also cover those proposed by Mamata when she was railway minister, and would now reap the benefits as chief minister.
Reportedly, the Prime Minister is likely to keep a very close watch on all major investment decisions of over Rs 100 crore. While mega projects such as the R77,000-crore DFC -- which in any case will be funded largely by the Japan International Cooperation Agency -- would sail through, other projects specific to West Bengal may undergo some close scrutiny by the Prime Minister's Office.
Growth on the Fast Track
(This article appeared in The Financial Express, 2011-06-29 and is reproduced here by permission of the author.)
With no less than 54 projects in hand, totaling an investment of over Rs 29,057 crore, Rail Vikas Nigam Ltd (RVNL) a wholly owned subsidiary of Indian Railways, has plenty on its plate to keep it busy for the next one decade or so.
These projects involve 2,689 km of track doubling, 263 km of gauge conversion, 798 km of new lines, 1,654 km of electrification and 66 km of metro projects, the last being mostly in Kolkata, which the former railway minister Mamata Banerjee, now as chief minister of West Bengal, would very much like to see fast-tracked.
The promptness with which RVNL had taken up some of her pet projects like the locomotive components factory at Dankuni, the diesel multiple unit manufacturing facility at Sankrail (now being built at Haldia -- both with a potential for creating jobs) and extension of the Kolkata Metro network have apparently helped to boost Banerjee's credibility as an achiever, perhaps even helping her at the hustings a few months ago.
Born out of the necessity to speed up a large number of urgently needed additions to railway infrastructure, RVNL came into being in January 2003 under the Company's Act, 1956. A special purpose vehicle (SPV), it is a fully owned subsidiary of the railway ministry and follows the provisions of the Railways Act, 1989, and became fully operational from March 2005 on appointment of the board of directors.
Its original mandate to strengthen four mega bridges along the Golden Quadrilateral -- on the Ganga, (Munger), Brahmaputra (Bogibeel), Kosi and Nirmali -- provide port connectivity and raise resources from the market has undergone some changes.
RVNL is now actively pursuing various models such as SPVs and the build operate and transfer model, apart from seeking Asian Development Bank funding to finance the projects instead of depending solely on market borrowings, which can sometimes prove to be prohibitively expensive.
In a major departure from the normal mode of funding of projects by the railways, it has been singularly successful in adopting the public-private partnership route and in maintaining a debt-equity ratio of just 2.3:1. With only 13% as equity, it has garnered on an average 18% contribution by the stakeholders and the rest as debt from the market. In the process it had to relearn the finer points of preparing a detailed project report and bankability reports, ensure financial closure, resource mobilisation and execute projects on a fast-track basis.
Among some of the innovative inputs have been construction of a 87 m long subway under 12 rail tracks by adopting the box pushing technology in Chennai, developing 45 m long pre-stressed concrete girders fit to carry 30-tonne axle loads, and setting up of 60 cu m/hr capacity computer-controlled automatic batching plants.
Despite the plethora of projects, it has managed to keep a lean organisation with just under 270 employees located, -- besides the four metros, at some of the major cities like Secunderabad, Bhubaneswar, Bhopal, Raipur, Jaipur, Pune, Hubli and Bilaspur. Starting with just Rs 357 crore in 2003-04, it has logged up an impressive cumulative expenditure of Rs 9,322 crores in 2010-11, completing no less than 23 projects including two major bridges, a 3-km second one on the Mahanadi and a 4.6-km bridge on the Vallarpadam-Idapally stretch along with railway electrification.
It has also managed to convert the 215-km Phulera-Rewari and 80-km Phulera-Ajmer sections from metre gauge to broad gauge, while at the same time adding a double line, providing vital direct link for freight from the north to ports in Gujarat and beyond, eliminating the circuitous route via Jaipur and cutting down on transit time.
By end of last year it had recorded an impressive tally of 1,590 km of gauge conversion, 662 km of doubling, 194 km of new lines and 1,335 km of track connected with railway electrification.
Lending a major helping hand to export drive, it is providing rail connectivity to five projects, starting with the 301-km Kutch-Gandhidham railway line. The Kutch Railway Company Ltd, an SPV created for this purpose, has already paid a dividend of Rs 3 crore for 2008-09 and Rs 10 crore for 2009-10.
Considerable progress has also been made by two more SPVs -- Bharuch-Dahej Railway Company Ltd for gauge conversion of the 62-km Bharuch-Samni-Dahej line and Krishnapatnam Railway Company Ltd for a 122-km new line from Krishnapatnam to Obulavarapille. Unfortunately, land acquisition woes of Orissa have hit the 82-km new line from Hardaspur to Paradip port though some head way has been made for the 99-km alignment from Angul to Sukinda.
Perhaps the most important factor of RVNL's entering into a large number of projects has been its success in attracting some of India's big-time construction companies. The list reads like a who's who of the infrastructure world, including the likes of Larsen & Toubro, Tata Projects, Simplex, IVRCL, Nagarjuna Construction, BBJ, Gammon, Afcons, ECIL, MCML Private Ltd, DS Construction, etc.
It has also led to higher transparency in the tender processing, better quality, higher reliability in project implementation and most importantly, absence of any local or extraneous constraints associated with small-ticket projects.
With the Prime Minister himself now being in overall charge of the railway portfolio and his emphasis on three key areas, namely, strengthening the Golden Quadrilateral, and strategic link to the Kashmir valley and the northeast, RVNL would perhaps sooner than later have to enter the northeast region too, where a plethora of new challenges await it.
The Rise and Fall of British Rail
(This article appeared in The Financial Express, 2011-07-13 and is reproduced here by permission of the author.)
The railway workshop at Derby, a pioneer in manufacturing rail coaches, including the path breaking HST (high speed trains) and a DMU (diesel multiple unit) configuration, is struggling. It is the last of half a dozen rolling stock manufacturing units of the erstwhile British Rail that survived the axe of privatisation.
Owned by Bombardier after privatisation of the British Rail more than a decade back, the workshop reportedly had to cut 1,429 jobs for the lack of orders, the unsuccessful bid for a $2.4-bn order for 1,200 train sets for Thameslink having been won by its rival Siemens of Germany. What is worrying for the workshop is that it will end up losing nearly 500 of its highly skilled permanent old workers who are just irreplaceable.
Britishers are indignant that while the UK government, in a hands-off approach, professes to get the best value for money for its travelling public, Germany and France, if faced a similar situation, would have factored in social costs and tailored the EU tender to keep the order for themselves, and saved the jobs at home. Undoubtedly UK is a unique example of a PPP (public-private partnership) model wherein the private companies make all the profits while the public (passengers and government) ends up paying the bill. In the ever growing search for profits private companies have no qualms about job losses, even when long-serving employees have to be shown the door.
Not that the Railways in Britain were not privately held. During the initial stages, scores of companies were created, logging up 6,100 miles route length by 1851, and 19,500 miles by 1907. However World War-I saw these 178 independent companies being brought under the state control, allowed by the Regulation of Forces Act of 1871, which had been enacted exactly for such an event.
In 1923, at the end of World War-I, the government was required to pay compensation for the war effort carried out for over four years and to complete asset renewals and deferred maintenance works. A large number of railway workshops had been converted into munition factories and they had to get back to their normal functions.
However, during the war important lessons had been learnt of the economies of scale which could be obtained by operating the railways as a single system instead of as independent entities. Time was ripe for nationalisation, though it was to eventually come many years later. Meantime, Sir Eric Edders, and ex-railway man, who had become the minister for transport, came up with the idea of forming seven groupings. Scotland and London was to have its own networks with Ireland, which had a civil war going, was to be left out. Edders was finally able to bring it down to four groups viz. GWR (Great Western Railway), LNER (London & North Eastern Railway), LMSR (London Midland & Sheffield Railway) and SR (Southern Railway).
The GWR simply took over 26 minor lines, and before the deadline of July 1923 other three also had many of the smaller lines voluntarily joining them. However, this reorganisation was very much more a painful and difficult exercise than a similar reorganisation of the Indian Railways carried out by the late Lal Bahadur Shastri, involving a dozen government-owned and scores of private and princely state railways in the 1950s.
Unfortunately in the UK, the old company rivalries persisted and soon after World War-II the government realised that the existing system was struggling to survive, what with the road haulers muscling in to take away high-value business with home-to-home deliveries as their strong point. Being a common carrier the Railways were also obliged to carry anything and everything offered by the public, while the private road haulers could pick and choose their cargo. The compensations given by the government went promptly towards payments of dividends as the Railways were anticipating nationalisation since now the Labour party was now in power. As anticipated, on January 1, 1948 the Railways were nationalised and the British Rail came into being with six regions made out of the four private companies.
However, perhaps the most critical factor viz. the independence of British Rail Board was denied and it continued to function under the ministry of transport, which looked after not only the railways but roads, ports, and waterways, all under the Transport Commission. with the civil service calling all shots!
High-Speed Trains - A Pipe Dream for Indian Railways?
(This article appeared in The Tribune, 2011-04-03 and is reproduced here by permission of the author.)
Mamata Banerjee, the Railway Minister and the stormy petrel of West Bengal does not believe in mincing words. She has always called a spade a spade. She once again amply demonstrated this while presenting the Railway Budget to Parliament.
No wonder, scores of railway projects which are financially unviable but serve to develop the economy of rural or backward areas are, according to her, socially desirable, and hence worthy of being considered for implementation by the Railway Ministry.
In her quest, Ms Banerjee has managed to persuade Union Finance Minister Pranab Mukherjee to provide Rs 20,000 crore as a budgetary support for 104 new lines proposed by her a few years ago and for which surveys have been completed. They can now be taken up for construction in 2011-12 and beyond, whether they meet the norms of IRR (Internal Rate of Return) or not.
High-speed corridors have been talked about by successive Railway Ministers since the last one decade. However, Ms Banerjee for the first time has been honest enough to admit that nothing much has come of the past initiatives.
She proposes to now hire a Japanese consultant to carry out a pre-feasibility study of a 160-250 kmph (kilometres per hour) high-speed corridor on the Delhi-Mumbai leg of the Golden Quadrilateral, to be extended later to other sections, i.e. Delhi-Kolkata, Kolkata-Chennai and Mumbai-Chennai. After all the Japanese were the first one to conceive and implement the high speed era of the Shinkansens almost half a century back in 1964.
"Imagine whisking through towns at speeds over 100 miles an hour, walking only a few steps to public transportation, and ending up just blocks from your destination. Imagine what a great project that would be to rebuild America."
With these famous words in a speech delivered on April 16, 2010, US President Barack Obama announced a new vision for high-speed and inter-city passenger rail service in America. It was also a part of the extensive packages put together by his administration to revive the economy, develop infrastructure, start new manufacturing activities, create jobs. At the same time, it promised to reduce overcrowding of roads and resultant carbon emissions.
However, the high-speed (around 250 kmph) concept is useful only when it helps to connect cities within a 500-km radius enabling a commute of not more than two hours. It helps to slow down, sometimes even halt and reverse migration from the Tier 2 and Tier 3 cities to major urban centres such as Metros.
Indeed, the concept of high-speed trains has been highly successful in countries such as Spain where all major cities are within a 500-km radius of Madrid, its capital. It could be ideal for linking cities such as Ludhiana-Delhi, Chandigarh-Delhi, Delhi-Gwalior, Chennai-Madurai, Mumbai-Ahmedabad, Kolkata-Dhanbad etc. China's very own bullet trains -- a pair of 'D' trains, capable of a maximum speed of 250 kmph -- leave Shanghai, and Beijing everyday at the same time, at 10.50am reaching their respective destinations -- 1,463 km away -- at exactly 8.49pm or just under 10 hours, maintaining an average speed of 146 kmph.
Back home, the superfast Rajdhani Express, the pride of the Indian Railways, covers 1,389 km from Mumbai to Delhi in 17 hours, clocking an average speed of just 82 kmph.
However, think-tanks in China have now realised that high-speed (250 kmph and above) corridors on long distances such as between Beijing and Kowloon in the south end up being too costly with no appreciable benefits. ln India, a slightly higher average speed of 160 kmph, for which the Railways also would not have to shell out mega bucks for the upgradation, would be quite adequate for the Delhi-Kolkata journey to be completed in just over nine hours and the Delhi-Mumbai run under nine hours, giving a business traveller enough time not only to complete his work but also save on hotel bills.
With trains running at an average speed of 250 kmph, completing a journey from city-centre to city-centre in just under two hours would also save a traveller hassles of a long commute to and from the airport, security checks and uncertainty created during those foggy days.
Trains may be delayed, but you don't have to cool your heels in the passenger lounge waiting for the announcements and, last but not the least, they will always reach you to the intended destination, and in one piece.