The Hindu Business Line : Rail freight: The traction plan

In a recent presentation, the RITES Executive Director suggests a three-pronged action plan by which the Railways can improve its cargo-carrying infrastructure and regain lost freight traffic market share.

WITH the Indian Railways steadily losing its share of cargo across the country because of inadequate capacity expansion, the need for revamping and modernising the system to keep pace with the developments in this sector has come into sharp focus.

The Government is working out ways to improve rail infrastructure for logistics effectiveness, as industry and corporates are increasingly looking for better services.

Indeed, although there has been a more than five-fold increase in the freight carried by the Railways, from 93 million tonnes in 1950-51 to 581 million tonnes in 2003-04, the network and rolling stock expanded only marginally in this period.

In fact, the number of locomotives has fallen, from 8,209 to 7,817, while that of wagons has gone up slightly, from 2.05 lakh to 2.28 lakh — a mere 11 per cent increase — during this period. "Clearly, the need of the hour is to strengthen the railway system to take on the emerging challenges," a logistics analysts said.

Of course, in terms of legacy, the Indian Railways is still a a strong monolithic institution. It is the world's second largest network with 1.08 lakh track km, the world's largest employer with 1.44 million employees and its annual revenues are around Rs 4300 crore billion.

According to Mr Sanjay Misra, executive director, RITES Ltd, 95 per cent of the freight carried by the Railways originates from the core sector and includes coal, fertiliser, cement, petroleum, foodgrains, steel and iron ore.

But there are certain mismatches. While 74 per cent of the total network is broad-gauge, this section earns 99 per cent of the freight revenue. Similarly, the Golden Quadrangle (connecting the four metros) and its diagonals, encompassing 9,935 km, comprise only 16 per cent of the total rail network. And yet this section carries 65 per cent of the total railway freight.

In recent times, the Railways has been characterised by certain trends, including the declining market share — it has gone down from 89 per cent in 1950 to 33 per cent in 2004. "This reflects the inability of the system to generate adequate capacity," Mr Misra said, in a presentation on `Infrastructure for Logistics Effectiveness-Railways' at a recent CII national conference in Mumbai. He added that, in part, it is due to the problem of traffic mix.

What is of greater concern is the freight rates of the Indian Railways, which continue to be relatively high. For example, for core traffic, its tariff is higher than in the US — coal movement costs 35 paise per tonne-km in the US against 74 paise in India.

"The North American average rail tariff is two cents per tonne-km, which is about 50 per cent of what it was 20 years ago. Consequently, US railroads have regained lost market share to about 40 per cent," Mr Misra pointed out.

The Railways is aware of the projected growth in container traffic movement within the country and the potential it holds for raising freight revenues.

In 2003-04, the Railways moved 6.61 lakh TEUs, of the total of 27 lakh TEUs handled by Indian ports; a 24.4 per cent share of container traffic movement , with the number of trains deployed per day being 9.66.

Reports indicate that the container handling capacity of Indian ports would increase to 155 lakh TEUs by 2021-21, with the anticipated rail share being 56.75 lakh TEUs, or 38 per cent of the total cargo. And for this, the Railways would require 70.17 trains per day.

Another avenue of growth for the Railways is the increased movement of steel cargo. The the current capacity of steel plants is 23 million tonnes, but new units are expected to generate another 75 million tonnes (Orissa: 45 million tonnes, Jharkhand: 24 million tonnes and Chattisgarh: 6 million tonnes).

How can the Railways improve its infrastructure in the short and long term? Mr Misra said that if the axle load could be increased, the Railways could become more competitive, while the wagons needed to be made wider and/or taller.

"We are unable to take full advantage of our wider gauge of 1676 mm. Railways with narrower gauges of 1435 mm pack in more volume and weight in their wagons than we do," he pointed out.

He suggests a three-pronged action plan, involving progressive segregation of freight and passenger services by laying dedicated freight corridors, introducting higher-axle-load rolling stock and running double-stack container trains.

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