Business as usual

While professing to be pragmatic and fully aware of the financial mess the Railways is in, Railways minister Sadananda Gowda nevertheless could not resist announcing new trains, though mercifully limiting them to 43 in all.

At a very rough estimate, the Railways spends about ₹5 crore to run a train, passenger or freight, while it earns about ₹2.2 crore from a passenger and a whopping ₹14 crore from moving goods.

This pattern is almost the same the world over. Given its vastly superior earning capacity, the 14 hard-nosed ‘Class I’ railroads of the US, with over 200,000 km of network between them, have understandably put all their eggs in the all-important ‘freight’ basket.

Yet, successive rail ministers have chosen the populist path, with freight subsidising passenger business. To bridge the gap, freight tariffs have seen yearly, and even half-yearly hikes, scaring business away. The Railways is now left carrying only 31 per cent of the nation’s freight, as was revealed by Gowda himself in his maiden speech in the Lok Sabha on Tuesday.

According to Gowda, the level of surplus available with the Railways has plunged from ₹11,754 crore in 2007-08 to only ₹602 crore this year, leaving little room for planning big. However, this did not stop him from announcing a 530 km-long Ahmedabad-Mumbai high-speed ‘bullet train’ corridor, for which he has made a token grant of ₹100 crore.

Of the 676 projects in the Railways’ pipeline, only 356 have been completed so far. To complete the rest, ₹50,000 crore will be needed every year, for the next 10 years. With the operating ratio touching 94 per cent, a slew of measures to garner funds for ongoing projects have been announced, including the Planning Commission’s magic formula — PPP (public private partnership) — which has been far from successful in both the Railways and road projects.

Foreign direct investment, particularly for providing rail connectivity to ‘Sagar Mala’ (a string of half-a-dozen ports along the West coast), the six railway PSUs pitching in with their cash reserves, market borrowings, etc. are some of the alternative routes proposed for garnering finances. How successful these alternatives would be is anybody’s guess.

A boost for freight was Gowda allocating most of the funds for 2014-15 for capacity build-up for strategic lines. He also kept away from announcing populist projects on socially desirable grounds. Twenty three ongoing ‘strategic’ projects in North-East have been given a priority with Gowda allocating ₹5,100 crore, which could help the region’s economy.

Gowda also announced low-cost, high-speed solutions involving enhancing rail speed from the present 110 to 160 kpmh on some selected . Though 300 kmph variety may be a distant dream, even the low-cost option could prove to be a game changer by connecting cities within a 500-km radius of a metro, enabling a commute of just under three hours, from city-centre to city-centre.

Another advantage is the possibility of it slowing down migration to major urban centres and perhaps even start reverse migration of those who prefer a more relaxed life in a small city.

Though the format of the budget speech was the usual reeling out of numbers, scores of new passenger amenity schemes, including PPP initiatives for providing escalators and food courts at major stations were announced.

Citizens of Bengaluru will have something to cheer about as Byappanahalli gets to be first-ever railway station to be developed as a greenfield project, set to rival the airport at Devanahalli!

The writer is a former member of the Railway Board

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