Thursday, March 8, 2012

Indian Railway, Part IV – Will the Phoenix rise again?

Indian Railway, Part I – A Race to Bottom
Indian Railway, Part II – Where we are going?
Indian Railway, Part III –  Accidents

Railways increased the freight rate for commodities. Hike varies from 15% to 24% covering a broad range of commodities, including Coal and Cement (18 to 24%), food grain and fertilizers (20-25%). However, rates for iron ore are reduced (#13).

As the common sense suggests, rationale for the hike is to reduce the swelling gap between expenditure and income, in other words to cover the input cost. Through the increase in freight rates Railways aspires to add an additional 15000 to 20000 crores rupee to her income.

Well, at the time of writing this article, railway is yet to decide on whether to raise the passenger fare or not. Currently the freight division’s revenue is compensating the shortfall in passenger revenues. In order to compensate the dip in margin due to the increasing input cost either they have to increase the freight charge or the passenger charge. Railways and the ministry are much more comfortable in doing the latter.

These types of knee jerk reactions to stop the downfall will not able to stop it in the long term. Policies which no longer assess the long term interests are affecting the institution. Look at the 'Job for Land policy’, according to the policy one member of each family from whose the land was acquired will get compensation according to the market prices, in addition to that one member from each affected family will get a permanent job in Railways.

Good policy isn’t it? But Eastern Railway soon realised that it is not viable to implement the policy as it is. In one situation when railway initiated land acquisition for Furfura Sharif - Dankuni railway track, they need to provide job for atleast 2300 people in order to lay just 19km track.

Conclusion - For survival

For becoming competitive enough in the future railways needs to concentrate on the vital sectors. Here, I can suggest a number of points which I think is very important for them to look in to.

1. Concentrate on the safety aspect; we can’t afford any more collisions.
2. Railways shouldn't give subsidy in passenger rates beyond a sustainable level.
3. Railways job is manufacturing, running and maintaining trains, tracks and associated infrastructure along with its consultancy business. All other non-core areas should be spinned off - by making it independent companies
4. Railways should be realistic in declaring new projects and trains - it should not become a tool for gathering votes.
5. Instead of a strictly top down departmental structure, railway should follow an enough decentralised structure.
6. Zonal and mid-level Managers should get more authority over finance and running the institution.
7. Railways should focus on port-city connectivity and try to accelerate freight transfer rate. Dedicated Freight Corridor a good step in this way, we should appreciate the government for it.
8. IR has to eliminate so many colonial time rituals which results in the wastage of time and money.
9. IR should concentrate on completing the projects in time; we can't afford to repeat another Kolkata Metro

With the hope that Indian Railway will rise again...



13. Railways to garner Rs 20,000 cr from freight hike

Some useful Rail links

1. Customer Services- SMS 54959, 57886, 5676747, CALL - 139,Email -
2. Train Schedule
3. PNR Status
4. Station Codes
5. Refund Rules
6. Ticket Reservation
7. Train Running Information
8. Complaints and Suggestions
9. Parcel Service and Charge Calculator

Photo Courtesy - Ministry of Railways, Government of India. Photos are edited later to suit this article

No comments:

Post a Comment