Railways project

 Railways project

“Railways, perhaps along with post offices, are the only two institutions in India with a deep network which if tapped judiciously can create substantial improvements in the hinterland. Railways was always considered only as a mode of transport in our country, we want to see Railways as the backbone of India's economic development.” 

                        Shri Narendra Modi Prime Minister of India December 25, 2014

 Introduction

Indian Railways is the lifeline of the nation. It traverses the length and breadth of the country providing the required connectivity and integration for balanced regional development. The system never rests; it has been up and working unceasingly for the last several decades. It is an integral part of every Indian’s being. It is one of the pillars of the nation.

In an earlier era, the Indian Railways have been described as “imperium in imperio”, an empire within an empire.  The size and scale is gigantic.  The United States, China and Russia are the only countries that have longer railway lengths, measured in kilometers.  

Indian Railways has suffered from considerable under-investment during the last several years. As a consequence, capacity augmentation has suffered and so has the quality of service delivery. Resources have been insufficient for improving customer satisfaction and introducing technological improvements. Investments in safety have also been insufficient. This is a vicious circle which I desire to convert into a virtuous circle by bringing in greater investments which will generate higher revenues and better service delivery.

Despite its problems, Indian Railways is not down and out; it is the only organization in the Government of India that pays for its wage bill, pensions and working expenses in its entirety. It also accounts for replacements and depreciation like any commercial concern should and pays a dividend on the capital it gets from the Government of India. 

The objective of this paper is to show the challenges that the organization is facing today. It also shows that Indian Railways is perched on a precipice but is capable of flying off and attaining great heights. The organization, especially its staff, has inherent strength and I am confident that a clear direction, targeted investments and well- defined priorities can make the organization grow by leaps and bounds. Lifeline of the nation 

Background

 Indian Railways (IR) is a great national asset. A single transport network connects far flung areas of the country. It is one of the largest transportation and logistics network of the world which runs 19,000 trains. It runs 12,000 trains to carry over 23 million passengers per day connecting about 8,000 stations spread across the sub-continent. It is equivalent to moving the entire population of Australia. It runs more than 7,000 freight trains per day carrying about 3 million tonnes of freight every day.  Its network of 65,000 route kilometers is more than one and half times the circumference of the earth. It has joined the select club of countries comprising Chinese, Russian and United States Railways with an originating freight loading of 1008.09 million tonnes (i.e. one billion plus) in 2012-13. During 2013-14, Indian Railways carried 1.05 billion tonnes of revenue earning freight traffic and is expected to carry 1.1 billion tonnes in 2014-15.   

             The expenditure on Railways as a percentage of total transport expenditure has declined considerably. Railway expenditure as percentage of transport sector expenditure used to be about 56% in 7th Plan (1985-90).  It has reduced to 30% in 11th Plan (2007-12).  IR in last two decades has remained under-invested whereas the road sector has witnessed a surge in investments. The share of IR in overall GDP has been static at 1% and has, in fact, gone down to 0.9% in 2012-13.

  Growth Pattern since independence

Challenges

 The biggest challenge facing Indian Railways today is its inability to meet the demands of its customers, both freight and passenger. Apart from the quantum of investment, quality of delivery is also an issue. Cleanliness, punctuality of services, safety, quality of terminals, capacity of trains, quality of food, security of passengers and ease of booking tickets are issues that need urgent attention.

  Indian Railways has suffered from chronic and significant under-investment as a result of which the network expansion and modernization has not happened at the requisite pace leading to an erosion of the share in national freight and passenger traffic.  There is a clear recognition of the fact that for serving as the lifeline of the nation and making a contribution to the country’s growth, the organization needs to become operationally and financially sound. 

Due to under-investment, there has been severe congestion on the network and has resulted in the inability of the system to accommodate more trains and increase the speed of trains. Therefore, the need of the hour is to undertake a massive infrastructure expansion and decongestion program coupled with upgradation of technology and judicious electrification of tracks along with enhancement of terminal capacity. It is evident that the real issue today is the lack of physical capacity over IR on key routes due to severe congestion and the incremental traffic is being offered on the saturated routes only. The consequential impact of the above arises in the areas network expansion, customer satisfaction, project planning and implementation and safety.