The operating ratio of Indian Railways has been touching 97 per cent in 2015-16, which made the ministry realise that it would not be possible to pay the wage bill for its employees in 2016-17, let alone implement the Seventh Pay Commission recommendations. Frantic calls made to the finance ministry for support only met with advice to generate its own resources.

The largest contributor to losses for IR is passenger traffic, where IR recovers only about 50 per cent of the actual cost of moving passenger traffic. In order to avoid increasing passenger fares, it has become a practice to raise freight rates. Over time, this resulted in freight fares being about 63 per cent more than the cost incurred by IR. With higher tariff and slower movement, the share of rail in freight traffic has declined.

However, if passenger fares are hiked substantially and freight rates cut, will it be possible for IR to cater to the additional freight traffic with improved quality of service if it comes? In all probability, no. This is because the rail network productivity and employee productivity of IR is way below global benchmarks. Network productivity is only about 45 per cent of China’s, while employee productivity is about 68 per cent of that of China. 

Network productivity and employee productivity are linked in such a way that with improved network productivity, employee productivity would also improve. China is considered for comparison as the rail traffic profile of India and China are reasonably similar.

Network productivity One big issue is increased stops introduced on mail/express routes. The average speed of mail/express trains, which essentially carry passenger reservation system (PRS) passengers (except for a couple of coaches of the general compartment), remains stagnant at about 60 kmph since independence. Why? These trains were introduced to cater to origin-destination pair demand.

However, over a period of time, umpteen stoppages have been introduced between the origin and the destination and at times the trains were extended beyond the O-D pairs, although most passengers travel between the cities/towns of the O-D pair.

The number of general compartment passengers declined rapidly between 2013 and 2015, indicating that passengers don’t prefer general compartment travel any more; the demand for long distance rail passengers has been increasing. This is the early signal on which IR has to rework its strategy.

IR operates about 2558 mail/express trains, which are essentially PRS trains. The average lead of PRS coach passengers is about 600 km. Given the fact that many are overnight trains with travel time of about 10 hours, it may be inferred that the journey is essentially between O-D pairs or stations near the O-D pair.

Most trains operating over a distance of 400-800 km are overnight trains. IR should map passengers between various O-D pairs along with the express/mail trains and convert a sizable number of them to limited stop service (LSS) trains.

The LSS trains pick up passengers from the origin and nearby stations and drop them at the destination and its nearby stations (say up to 10 per cent of the distance). With this kind of rescheduling, trains taking 10-14 hours, respectively, would take about 7-9 hours, respectively, reaching an average speed of about 90 kmph.

The idea of introducing LSS trains is not to deny connectivity to smaller towns but to identify the O-D travel patterns and provide optimum rail connectivity with the limited network resources, thereby benefitting both the passengers and IR. IR should charge a premium for LSS trains, which would also decrease the expenditure on the part of the IR on employee costs, fuel consumption, etc, and release some network capacity to enhance IR’s network productivity.

Slower trains Another segment of passenger services that requires reforms is slow-moving passenger trains. IR operates about 3875 slow moving passenger trains for shorter distances with by and large general compartment classes and an average speed of about 25 kmph. Inherently, these trains drain IR’s exchequer. Moreover, the demand for these trains has been drastically decreasing with improved road network. More than the drain on the exchequer, these trains drain network capacity substantially, especially when they run on high density routes.  These have to be phased out.

These two operational strategies alone may not bridge the entire gap between revenue and expenditure that IR is facing now. However, it would be the beginning of rail operational reforms to operate more passenger and freight trains at higher speeds and better yields, thereby reducing the deficit.

The writer has a doctorate in Public Systems from IIM-A. The views are personal

 

Related Topics
comment COMMENT NOW