The Hindu Business Line : Give private players a chance

One can only hope that the public-private partnership the Ministry hopes to rope in would be secured through "a transparent policy" and reasonable rate of returns to the builders and operators of such facilities.

New Delhi , Feb. 24

Predictably, the Rail Budget 2006-07 of Mr Lalu Prasad stuck to the much-touted talk of sparing both passenger and freight traffic of the burden of revision of fares, especially when the users of the system are none too happy due to the deteriorating quality of services.

No doubt, the oldest mode of transport finds the competition from low-cost airlines and road transport tough to cope with. Hence, the Rail Budget has proposed a slew of sops for all categories of rail users in a bid to woo them on a journey to experience a different sort of customer satisfaction!

Mr Lalu might have drawn dry smile among the uncomplaining rail users when he grandly declared that 2006 would be the year of passenger service with a smile!

With Assembly elections due in six States in the next couple of months, the UPA Government has a lot in stake and cannot rub the people the wrong way through new taxes and levies even as the system and the economy do require massive dose of outlays to fund social and physical infrastructure.

High-density network

No wonder at the post-Budget briefing held by the Railway Board, its Chairman, Mr Mr J.B. Batra, said that the focus of the Budget was on high-density network entailing decongestion and improving speeds and providing satisfactory services to users through a raft of initiatives on the pricing front, besides stepping up existing amenities and augmenting them.

Even as the yearbook 2004-05 released today by the Railways conceded that the average speed of goods trains was 23.3 kmph on broad gauge and 16.9 kmph on metre gauge, it is gratifying to note that the Railways are going in for a detailed multi-modal high-axle load (25 tonne axle load wagons capable of hauling loads up to 80 tonnes) with computerised control on western and eastern routes at an estimated cost Rs 22,000 crore.

Public-private partnership

But as the Minister conceded that integral to the new container policy is the need to develop rail-linked container depot and integrated logistic parks, one can only hope that the public-private partnership (PPP) the Ministry hopes to rope in would be secured through "a transparent policy" and reasonable rate of returns to the builders and operators of such facilities.

Considering the fact that the railways were able to achieve a new record of loading 668 million tonnes of freight with a historic growth of 11 per cent by optimally availing themselves of the extant rolling stocks and long turn around time of wagons, thanks to the booming economy, the railways need to funnel massive investment through PPP channels by designing a proper framework for the success of such partnership.

If the Minister could tom-tom the success of reduction in wagon turn around time and additional loading of 4 to 8 tonnes per wagon which has led to an increase of 100 million tonnes in loading capacity and generation of over Rs 5,000 crore in freight revenue, the private sector would definitely be goaded by business calculations to seize the opportunity in the building of a dedicated freight corridor provided it is offered the requisite spurs to take the plunge.

But the record of railways in part-privatisation activities in the past does not inspire much hope unless the underlying commercial judgement is duly brought to bear with the authorities.

The success of a dedicated freight corridor is crucial to the commercial viability of the Indian Railways over the long haul because out of every rupee the system earns as much as 64 paise come out of goods traffic earnings.

Moreover, this year's Budget is stressing on technological upgradation as the road to recovery and consolidation of the railways in the coming years.

Finally, the Minister has not shed his penchant for announcing introduction of 55 new passenger services, extending the run of 37 trains and also increasing the frequency of a dozen popular trains in the course of the next fiscal, even as the system has been found wanting in ensuring speed and safety to provide a modicum of comfort to users.

As experts have been time and again telling the Indian Railways to shed its non-core activities and focus on core areas to generate more resources by providing a reasonably satisfactory level of services, the time has come for the Indian Railways to contemplate parcelling out a few of its unglamorous but all the more essential activities so that the private players could take a chance to demonstrate their innate efficiency in running differently and diligently.