Budget 2021

Railway reform on modern track

BHARAT SALHOTRA | Updated on July 09, 2014

The Rail Budget is a step in the right direction. It recognises the urgency to improve execution by prioritising key projects instead of spreading limited resources across an unmanageable number of projects. It squarely gives a strong thrust to the use of Information Technology to provide better quality of service to customers. Opening the railways to foreign direct investment is welcome — it will provide the much needed push to the cash-strapped sector as well as foster creation of world-class rail infrastructure.

Bold steps needed

The Government’s proposal to fund big-ticket projects such as high-speed railways via public-private partnership mode and the allocation of ₹100 crore is certainly a positive step towards modernisation of the railways. Having said that, considering that the transport elasticity of demand with respect of the GDP is in the range of 1.25 to 1.5, the target to increase freight traffic by 50 million tonnes seems rather short of the demand. While some steps have been announced to increase passenger revenue, limited initiatives have been unveiled to improve the top line of the Railways.

While the decision to segregate the policy formulating Ministry of Railways from the Indian Railway Board is a good first step towards restructuring, the Government will need to take bold steps to ensure that a modern structure is put in place to ensure that the overall vision for transformation of Indian Railways as the key driver of India’s growth story is realised.

Safety first

The High Level Safety Review Committee (Kakodkar Committee) set up by the earlier Government had provided a number of key recommendations related to modernisation of railways. It is imperative that immediate action is initiated on these. Some initiatives such as implementation of ETCS-Level 2 need to be implemented on a war footing to improve safety levels. Similarly, the railways needs to upgrade its technology in locomotives as well as passenger rolling stock, beyond the LHB coaches supplied by Alstom, which technology is over 15 years old.

Alstom India is well-equipped and keen to provide modern technology in signalling, locomotives and high-speed trains to actively participate in the growth story of the Indian Railways. If the railways are to fully benefit the economy and the society, the Government will have to bring in more money, including private and foreign investment. In this regard, we feel the Government’s reform agenda is on the right track.

The writer is MD, Alstom Transport India

Published on July 09, 2014

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