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Thursday, February 28, 2013

Railway Budget 2013

Being an avid train buff, Railway Budgets hold special interest to me. So I came back from office at 12:00 Noon, and listened to the entire speech. There were many things nice about it, but many things which weren't. For almost an hour, the opposition listened to the speech fairly calmly with only a few interruptions, but the last few minutes, he found it difficult to read the speech.

But coming to trains, increase in freight and only an indirect increase in passenger fares was a disappointment. Increase in freight is a tax on all consumers of goods which are routinely transported by rail. Making excessive profits there implies a tax which is paid by all consumers, including the poorest of poor. So we have a very strange situation where we tax the poor to subsidize the middle class. But there is a more serious problem with this strategy. Railways is becoming less competitive to road when it comes to transporting goods. They are investing a huge amount of money into creating two dedicated freight corridors (DFCs). This is being done on the premise that there is a large amount of growth in freight which is just waiting to be tapped. But at the same time, Railways could neither reach their target of freight loading, nor could it generate the expected revenue. Are we going to be saddled with a large debt which we cannot pay in the future. Are we going to just start more passenger trains and the new lines become passenger lines, causing even more loss to the Railway finances. The future does not look very bright. But the Economic Survey suggests creating five more dedicated freight corridors in the country. All these corridors have the potential to boost Indian economy, but only if we are able to run a few freight trains on them.

But then I must also admit a sense of joy when the Railway Minister announced that the first construction contract in the DFC has been awarded for the Kanpur-Khurja section. So Kanpur is the place where DFC construction starts. We love taking lead in important mission projects of the country after all. At that time I did not think whether there will be freight trains on these new tracks, or whether the poor tax payer will have to pay even more tax to pay the bills of the middle class.

The discomfort of the Railway Minister was so obvious while he was reading either the names of the stations or talking about the technologies. He referred to IR using 60 KG per meter tracks, and using long welded tracks of 260 meters length. Well, IR has been using 60KG tracks for many years now. And my mind just went back to the convention of the Indian Railways Fan Club a couple of weeks ago, in which we had gone to this workshop in MughalSarai where Indian Railways welds 10 meters and 20 meters tracks to make single 260 meter tracks.

When he was referring to the projects, one wonders why do they have to announce things which they have no intentions of even starting, not to mention finishing. Take the example of Delhi-Ahmedabad route. They announced the plans to electrify it. The total cost is about Rs. 1121 crores, and guess how much money has been allocated in the financial year 2013-14. It is Rupees ONE THOUSAND ONLY. (Thanks to Neerav on Indian Railway Fan Club Forums for pointing this out.) At this rate the project will take more than 1 crore years to finish. But I guess they are counting on the fact that people are not rail fans, and they don't comb though the detailed budget papers to find such details. And by the time, someone understands the budget, and realizes that nothing is really happening on the ground, the elections in Rajasthan would be over. The survey of Mandhana-Panki was announced last year, and again this year. He announced that e-ticketing will now be extended from 00:30 to 23:30. But isn't this has been the time for a few years now. He talked about creating Bijwasan as another directional terminal for Delhi. But long time ago, another Minister had already announced this, and in fact other terminals in Delhi, including Shakurbasti. It was indeed laughable when he talked about sharing the costs of foot over bridges at the stations with state governments. I am sure he meant ROBs and not FOBs.

I think the most exciting announcement was about IRCTC. This really needs enhancement. He has given us hope that the capacity of IRCTC servers will go up by 3-4 times before December. Though it is unclear why it should take 10 months (assuming the unlikely scenario of no delays), but if it does happen by December, it will be a boon.

We need more executive lounges on the line of one at New Delhi station. But what was surprising to me was that the list was neither a set of stations from where several trains with AC-1 and AC-2T coaches start (because that would be the clientele for these lounges), nor were these a set of stations which have a lot of foreign and rich Indian tourists (except a couple). Was this list based on political considerations or more mundane considerations like availability of space on those stations.

I am also very excited about the revamp of the National Rail Museum at Chanakyapuri in Delhi. I do hope that they will involve some heritage experts and some rail fans in designing that revamp. NRM is too important to be left alone to Railway officers who have just finished their open line posting. There are some great conservationists amongst the railway fraternity themselves, and I hope they will be involved.

The Minister seemed very excited about the operating ratio coming below 90%. It is expected that in 2012-13, it will be 88.8%. While the ratio is better than previous years thanks to some hike that happened last year (in upper classes), a hike in freight, and then hike in passenger fares in January, it clearly shows that the situation is not comfortable yet for the Railways. With some hike again, he promises to bring it down to 87.8 percent in 2013-14, but that is neither here nor there. Clearly, with these operating ratios, the electrification of Delhi - Ahmedabad line will indeed take one crore years, as discussed above. The Fuel price linked adjustment that he has announced for freight should have been announced for passenger traffic also. The last I checked, passenger trains also need deisel or electricity to run. But, of course, he did mention that the proposal for setting up a Tariff Authority is on someone's table right now. Hopefully that will be done soon, and fares will not be decided on political basis (though looking at how tuition for engineering colleges is decided by "independent" committees, I really have no hope that Tariff Authority will do much better, but something is better than nothing).

He did raise superfast supplementary charges, reservation charges, cancellation charges, and tatkal charges. I had wished that the Superfast charges could be train and section specific and really linked to how much time do they save a passenger compared to a non-SF train in that section. That would allow a substantially higher raise in these charges then what has been announced and yet not pinch the passengers. On the other hand, raising the reservation charges substantially higher for AC classes has no rationale. I would have preferred a direct increase of AC fares, but would prefer to keep reservation charges of all classes closer to each other.

I look forward to the first AC-EMU to be introduced on the Mumbai suburban. Of course, I am also hoping that they will find serious bidders for the project to construct tracks on the Western Railways in Mumbai which will be raised. I look forward to travel by Anubhuti coach, which one hears may be attached to the Lucknow Shatabdi by the end of this year. But they should have taken care of waiting lounge too for the passengers of Anubhuti coach.

More trains at IIT gate. Electrification up to Kalyanpur. A train to Delhi on this track, I hope it is faster than Kalindi Express. A train which takes me from Kalyanpur to Anand Vihar Terminal in 8-9 hours and is overnight would be ideal. But what is the point of once a week train.

Free WiFi. Thanks for that. And really the focus seems to be to provide more and more passenger amenities. How will that happen without an increase in fares is the magic that we are waiting to watch.


2shar007 said...

One aspect of the freight tariff hikes, which might get unnoticed is that the momentum might shift to the roadways. In these times of volatile oil prices, it would be interesting to know what effect it might have on inflation.
Also, the idea of Railways having its own Mineral water plant and laundry system doen't quite ring a bell, as these services can be handled by the private sector. Political compulsions some may say...

controltrix said...

Worldwide passenger rail generally make losses after the advent of automobile and aeroplane. But due to high fuel prices, railways in the US have become much more economical. ( 1 gallon of fuel moves 1 ton of freight by 437 miles ~ 180 km/lit !!/ton US railway data) This is about 3X of that using road ( on good US roads). (In India it could be 5X due to bad roads).
So the freight rail industry is seeing a huge revival without asking for any subsidies.
Besides any thing more than 5-6 hours journey rail wud be the preferred choice. Unfortunately due to our feudal (mai baap sarkar) where things have to be provided by the govt as a favor and mindset of scarcity, ( our resources are only so much ) they have converted a huge gold mine into a liability.
Having so much potential to save fuel and reduce oil import bill politicians want to launch new road projects that never complete or are poorly maintained and promote private automobile at the expense of cheap , low carbon footprint public transport.
All they have to do is to let private parties do the interiors / sell tickets at whatever price they want to/ maintain their own trains(like aircraft buyback arrangement….aircrafts owned by GE aviation/finance are leased to indigo who maintain n operate them) . Each trains should have the company name so people can choose like they can choose the bus. Railways get a cut for track usage and engines. (just like railroad tycoon!!!) and get penalized for not getting there on time. Competition will automatically improve services.. If not entire trains, then atleast on a coach basis is a viable option. People will book tickets in xyz (company name) coach of say abc train .
Instead of trying to run anubhuti coaches (with luxury fares > LCC planes) which will simply run empty, a private partnership is better.
In 1853 the first rail started from CST to thane (~40 km). The journey took 50 min. after 160 years it still takes the same time !!!
Railways are supposedly a social good providing employment and mobility for the millions. Manual scavenging was banned in the country as a social evil, but the railway still employs it…why because it cant find a solution to dumping waste on the tracks.
In 1800s Europe had a system where if a train jumps a signal a bell would ring in the cabin. It was based on a simple system of metal brush hanging down and a piece of metal between the tracks (moving contact). Once it failed due to heavy ice built up on the metal (and driver unable to see the signal in fog) leading to a major accident in France.
The railways even lack such a basic system and we hear about trains jumping signals. Things still keep running in India with only so many fatalities is itself a miracle.
We added just 10000 Km in last 66 years of independence while british made 54000 Km in 90 -100 year