The Hindu Business Line : Running low on wagons

SUDDENLY EVERYONE SEEMS to have woken up to wagon shortage as if the crisis has happened overnight without the knowledge of the mandarins in the Rail Bhavan. If anything, the shortage is one of the prominent problems of the Railways, the others in the genre being the poor utilisation of tracks, the far-from-satisfactory state of the rolling stock, and an archaic signalling system. Till recently wagon procurement never even made it to the main agenda. This is not surprising. Successive Railway Ministers, especially in the era of coalition politics, used the monolith organisation to serve their limited political ends, caring little about running the system efficiently.

It will be unfair to blame the wagon manufacturers for non-execution of orders entailing huge backlogs. For, one, the orders are not placed on time. Two, the `free supply' items — that go into wagon manufacture — arrive at the manufacturers' works even later. For 2005-06 the situation is compounded by the Railways deciding to expand the list of such `free supply' items. The manufacturers, particularly those in the private sector, are understandably unhappy with this arrangement, as looking to the Railways means more complications, further delays and an ever higher level of backlog. The private wagon manufacturers would rather the Railways discontinued the system of free supply items, and allowed them to procure raw materials on their own. They are confident of sourcing inputs cost-effectively, which is the essence of competitiveness but obviously not encouraged in a government-controlled subsidy-ridden arrangement. If the Railways bleeds now, it is because of self-inflicted wounds.

The Railway freight traffic in past couple of years has been rising steadily the past couple of years and to cope with the situation, several measures such as allowing over-loading of wagons by two tonnes and slapping higher demurrage on customers to reduce the detention of wagons have been adopted. But can these measures yield benefits on a sustained basis? There have been suggestions for the introduction of commodity-specific wagons, though such an arrangement would increase the idle time. For example, dedicated wagons transporting coal from the mines in West Bengal and Bihar to power stations in the North come back as empties, tanker wagons are necessarily meant for one-way movement, as also the rakes transporting iron ore for exports unless there is a matching imported cargo at the ports concerned for the return movement. But dedicated wagons vastly improve the average turnaround time. The Railways launched with much hype Own Your Wagon scheme nearly a decade ago. But no one talks about it any more. One only hopes that the scheme will revive interest among the private firms now that the wagon shortage has become a matter of concern. After all it is the non-core private consumer who bears the brunt of the crisis.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Nepal: An Indian faux pas?

Running low on wagons

Economy: Build like the ant

Down the abyss?

How about the idea of a fixed-maturity equity fund?

HP's board flexes its muscles

Chancellor Gordon Brown for the World Bank?

Budget expectations

Branch banking