The Hindu Business Line : Keep on the right track

FOR DECADES THE one claim to fame that India could justifiably make was its largest rail network in the world. Yet over the years the Indian Railways had an accompanying claim to inefficiency of services, under-utilisation of capacity, and shortage of wagons and coaches for both freight and passenger traffic. Even as the economy shifted gears for fast-track growth, the Railways continued to be plagued by the same problems of shortages and inefficient use. Not any more.

In what can be considered the biggest surprise of the current economic upswing, the Railways has put in an increasingly impressive performance especially since 2002-03. Current indicators suggest a more efficient utilisation of freight wagons and an improvement, therefore, in the financial performance. What this means is that the largest public utility has been able to reorient its perspective about capacities; instead of demanding additional capacity in terms of wagons the Railways has used existing wagons more efficiently through a series of time-saving measures. For instance, it has reduced the free time for loading and unloading basically snipping at the turn-around time. The other change has been the willingness of the Railways to load more than the carrying capacity of wagons anything from six to eight tonnes. Not surprisingly, estimates suggest a freight record of 660-670 million tonnes this fiscal year compared to around 602 million tonnes in 2004-05; revenue earnings should therefore reflect this improved freightage.

Clearly, the Railways has been inspired by the winds of change to set into motion reforms at improving performance with existing capacities and infrastructure. A clutch of new schemes involving public-private partnerships have been introduced, for instance, the Wagon Investment Scheme (WIS), rail-side warehousing facilities whose outcomes the Railway Budget for 2006-07 should illuminate. At the same time, the attempt to increase efficiency of wagons by reducing turnaround from six to five days as the last Budget envisioned is laudable. More efficiencies can obviously be squeezed out from the existing assests, but in the medium to long term there may be no alternative to filling the shortage of wagons and hopefully the WIS scheme will help..

Such concerted action is necessary if the Railways is to recover at least some of the ground it has lost over the years. From an 88 per cent share of the freight market in 1950, the Railways has just 30 per cent with the road sector winning the preference of most customers. That passenger fares are among the lowest in the world is to its credit, yet every day many passengers are turned back for lack of seats on the trains. The Railways was once one of the largest commercial enterprises in the country, large enough to have its own Budget presented to Parliament. Now its turnover stands upstaged by many industries, even individual companies. The Ministry and the organisation have a lot of thinking to do.