The Hindu Business Line : Indian Railways: Putting freight back on track

WITH miles of paved roads and highways, and millions of vehicles to its credit, the US must be a road-based economy, right? Wrong, its network of over 1,45,000 miles (2,30,000 km) of rail track carries 40 per cent, more than any other mode, of the total inter-city freight.

The 100-tonne road monsters carry just 28 per cent, while waterways account for 14 per cent, and pipelines 18 per cent. Sixty-seven per cent of the nation's coal that feeds 56 per cent of the economy's voracious appetite for electricity, and 40 per cent of grain and farm products are moved by the thriving and very economic railroads. Since 1980, when the Staggers Act deregulated the industry, freight volumes on the US railroads have jumped by almost 50 per cent to 1.4 trillion tonne-miles.

While the Indian Railways has stuck to its knitting carrying basic commodities such as coal, iron ore, limestone, foodgrains, fertilisers, and chemicals, the US railroad has extended services to vegetables, fruit juices, forest products, and of course automobiles, 70 per cent of which are moved by rail and delivered factory-fresh to much valued customers.

Trainloads of refrigerated freight cars, called the Salad Bowl Express, hurtle across from the west coast to the east carrying, well, stuff salads are made of.

With 64,000 km (about one-fourth the US network), 8000 locomotives and 2,50,000 wagons (against 20,000 locos and 14 million wagons in the US), the Indian Railways merrily chugs along, carrying about 600 million tonnes of originating traffic, which is again about one-fourth of the 1700 million tonnes carried by the US railroads.

Back home, the Container Corporation of India Ltd., (Concor) an arm of the Indian Railways, has managed to capture almost half the export traffic and carried over 2 million TEUs (Twenty-foot Equivalent Units) last year, mostly between Delhi and Mumbai on its very successful container Rajdhanis which provide guaranteed transit time of 45 hours.

Constant improvements in productivity in the US railroad have cut the cost of carrying freight by 25 per cent of what it did a couple of decades ago, (in terms of inflation adjusted dollars), saving billions of dollars for the economy and making products more competitive in the global market.

The Association of American Railroads (AAR), a confederation of railroad companies, provides the critical leadership necessary to make the railroad industry more profitable. It does this by enhancing productivity through R&D and other support programmes.

It facilitates seamless inter-modal interchange through the electronic exchange of information between railroads and their customers and suppliers, and its advocacy in the public policy arena.

Unfortunately, the Railway Board, which owns and operates the whole system, has done precious little to improve its productivity. On the contrary, it has surrendered the vital area of public policy, investments, and pricing to politicians.

Consisting of CEOs of its 13 constituents (seven of which are called the Class 1 Railroads), representatives of the Canadian, Mexican railroads and the Amtrak also have ex-officio seats on the AAR board. Its most visible activity is representing its members before Congress, regulatory agencies and the courts. To keep itself in the forefront of emerging technologies, a Transportation Test Centre near Pueblo, Colorado, the equivalent of Indian Railways' Research Design and Standards Organisation at Lucknow, takes the latest in rail transport and safety improvements from the drawing board to the test track, and ultimately to use.

An aggressive scanning programme with support from the Massachusetts Institute of Technology (MIT) and the Texas A&M University seeks out emerging technologies that have been developed for other industries and have application potential in the railroad industry.

Simultaneously, a technical training centre on the campus of the Illinois Institute of Technology is conducting research for AAR providing it with vital inputs to improve productivity in maintenance and operations.

Among factors responsible for winning back freight from the road sector are environment, safety, and fuel conservation. A diesel locomotive is three times more fuel-efficient than a diesel truck, and emits one-tenth the hydrocarbon particulates and one-third the nitrogen oxide and carbon monoxide gases than the latter. Meanwhile, every new inter-modal train carrying containers double-stacked on flat cars takes 280 trucks off the highways, therefore making the roads safer for cars and other passenger vehicles. Besides, decongesting the highways eases pressure to build new ones.

Cross-subsidising passenger services and other populist un-remunerative projects costs Indian Railways an average of about 2.6 cents per tonne of freight over a mile, while the US railroads with their much higher cost of living and services are able to offer a highly competitive rate of only 3 cents for the same service.

For the hard-nosed businessman, a cent saved is a cent in profit, and in spite of the highly developed road sector, the US railroads continue to retain a pre-eminent position as an engine of growth in the US economy, a position which unfortunately the Indian Railways is fast losing.

(The author is a former Member — Mechanical — of the Railway Board.)

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Indian Railways: Putting freight back on track