Railways to take a hit of at least ₹6,500 crore as lockdown stalls train services

A 43-day break in train services – the longest since the 54-day strike in 1974 - will likely burn a hole of as much as ₹6,500 crore in the revenues of Indian Railways, further stretching its already strained finances.

The national transporter- which runs Asia’s oldest rail network - earns about ₹145 -150 crore per day from ferrying passengers across India, translating into annual revenue of about 53,000 crore.

The world’s fourth largest rail operator was forced to suspend service from March 22 as India imposed a country-wide lockdown to slow the spread of the coronavirus pandemic.

The stoppage of services left thousands of passenger trains idle and some 67,368 km of track out of use.

In March 2019, Indian Railways earned ₹4,440.35 crore as passenger revenue comprising ₹2,936.57 crore through passenger reservation system (PRS) and ₹1,503.78 crores through non-PRS (unreserved).

In March 2019, Indian Railways carried 404.45 million sub-urban passengers and 308.53 million non-sub-urban passengers. In April 2019, it earned ₹4,358.34 crore as passenger revenue including ₹2,818.45 crore from PRS and ₹1,539.89 crore from non-PRS.

In the same month, it carried 383.43 million sub-urban passengers and 300.11 million non- sub-urban passengers.

The March 2020 passenger earnings and passenger carried numbers are yet to be compiled by the Railway Ministry for making a comparison.

April 2020 will be a wash-out for the Railways as the entire month was hit by the lockdown.

Passenger trains use up about two-third of the capacity of the Railways. The remaining one-third capacity is utilised by freight trains but contributes some 2.5 times the revenue from passenger bookings to the Railways.

In March 2019, the freight earnings were ₹12,672.22 crore while in April 2019, revenue from freight trains was ₹10,652.28 crore.

The March 2020 freight earnings have not been compiled.

The Railways passenger segment has been growing only marginally.

“What is happening is that the reserved segment has been growing, whereas the unreserved segment has been coming down due to diversion of sub-urban traffic to metro rail in top cities such as Delhi, Bangalore and Hyderabad,” said an industry consultant.

Assuming that the lockdown is lifted on May 3, it would take the Railways many more days, if not months before it starts operating passenger trains at the pre-lockdown levels, adding to the woes of the country’s biggest employer.

“This is because social distancing, which is key to slowing the spread of the pandemic, is anathema to Railways,” a former Railway Board member said.

This will pose further challenge to the Railways in its efforts to compensate for the loss arising from the lockdown measures.

“If the social distancing norm is going to be strictly enforced, how will the Railways allow passengers to travel when the services re-start and what type of policy the ministry is going to draw up for this. Passengers travelling in unreserved compartments are much more than the capacity. There, social distancing will be very difficult to maintain. These are questions which needs to be answered at some point in time,” the ex-Railway Board member said.

“The situation may continue for a year or a year and half. Later, when the vaccine comes, it will ease,” he added.

While the goods trains remain operational, they are running at 60 percent of the capacity levels, due to demand slackness from closure of industries/factories.

COMMENT NOW