Railway fares may not be raised by NDA Government
HYDERABAD: When Suresh Prabhu presents the Modi Government’s first Railway budget in Parliament on Thursday, he is highly unlikely to announce across-the-board hike in railway fares or even reduce them in tune with the fall in diesel prices.
Indian Railways are undoubtedly in a dreadful state with successful Railway Ministers treating the public sector behemoth as a tool for furthering their political agendas rather than making it an efficient organization, quick on its feet and receptive to global changes. Mr. Prabhu should not allow himself to be encumbered by past legacy of this monopoly that has led to poor financials, over staffing by 30-40 %, negligible addition of new railway lines and stagnant growth in freight traffic.
But, first things first. However much the Minister may want to offset losses by hiking fares, he cannot ignore the fact that passenger ticket prices were raised by 14.2 % per cent and freight fares by 6.5 per cent less than a year ago. As diesel prices continue to fall, there is no way the Government can justify a fare hike. The argument that electricity prices are rising may not cut much ice considering that Railways stands to save US $ 2 billion on diesel in 2015-16.
If Mr. Prabhu’s budget has to be innovative, he has to make substantial investments on augmenting rolling stock, improving quality of coaches and wagons, building new lines, laying freight corridors, strengthening track and bridge infrastructure for high-speed operations and completing 350 pending projects that require an investment of Rs. 1.7 lakh crore.
This wish list is highly ambitious considering that the railways recover only 50 per cent of the passenger cost and is in position to raise fares. Mr. Prabhu may not, however, shy away from raising Tatkal fares and those of special trains that run on dynamic pricing.
Where will all the money come from?
Mr. Suresh Prabhu will have to depend heavily on support from the general budget for part-funding, say about Rs. 50,000. The rest has to come from commercialization of railway property, including naming a few trains after brands, attracting foreign investment in areas like high-speed trains and leaning upon State Governments to set up SPVs to fund new projects. The AP Government is willing to launch SPVs as it is vexed with the neglect of long-pending railway lines.
The Railways has often been faulted by the CAG over the basis on which it charges freight rates –- the shortest route to the destination and not on the kilometers traveled. It has pointed out that congestion on high-traffic routes indicates that the shortest route is rarely taken. Mr. Suresh Prabhu may heed to the CAG and revamp freight rates.
What will be watched with interest on the big day tomorrow is the extent to which the Minister goes in for privatization. It will be a test of his determination to turn around the railways as he will face the wrath of the Opposition and the 1.3 crore railway employees by any attempt to privatize railway projects.
The industry will keenly watch the Government’s commitment to faster and more efficient movement of goods through dedicated freight corridors. In its absence, the Railways is losing market share to the roads sector. Rail freight has doubled since FY02 to 1,000 million tonnes while the country waits for dedicated corridors.
Let alone freight corridors, the performance has been pathetic in building new lines too. Only 13,000 kms have been added to the 53,596 kms of lines that existed at the time of Independence. Just compare this with China which added 14,000 kms between 2006 and 2011. India has also to catch up immediately with China in improving connectivity along the border in the North-Eastern region.
Analysts hope Mr. Prabhu will launch several green initiatives like increasing use of solar energy, improving use of alternative fuels like CNG in railway transportation, developing waste-to-energy projects in railway stations that produce tonnes of waste and, above all, installing environment-friendly vacuum toilets. The execution is expected to begin after a trial in the Delhi-Chandigarh Shatabdi Express which will be installed with 80 vacuum toilets.
Time for Wi-Fi services at station premises
Among other expectations from Mr. Prabhu are introduction of Wi-Fi services on premises of important railway stations, CCTV cameras in ladies’ compartments of express and mail trains and an App for improving security of women passengers.
A huge challenge lies ahead in initiating work on high speed trains that can run upto 200 kmph. At present, the fastest trains like the Bhoopal Shatabdi touch 160 kmph, a far cry compared to the 300 kmph that the Shanghai-Beijing train routinely does in China. High-speed trains have remained an area of neglect considering that the Berlin-Hamburg train peaked 160 kmph way back in 1933 !
There is zero infrastructure to run high speed trains and the cost is prohibitive. According to one estimate, the 500 km long Mumbai-Ahmedabad route will cost Rs. 370 billion (US $ 8.06 billion). The coaches based on the Integral Coach Factory design are not safe at high speeds. They have to be replaced by Link Hoffman Busch (LHB) design coaches which have better fire-retardant ability, anti-toppling features, sleek ergonomics and higher service life. Even the LHB technology is over 15 years old.
Whatever explanations the Railways provides after each accident to highlight its safety record, many more measures are needed to prevent mishaps. Reducing the number of unmanned level crossings, adoption of new signaling systems and fixing accountability for every mishap, not merely on lower employees, are some of them.