GS Paper: GS3-13.Infrastructure: Energy, Ports, Roads, Airports, Railways etc:

The article analyses the implications and issues with the Indian Railways recent move to allow the private investors to operate the passenger trains on selected routes.

Let’s understand the structure of IR’s passenger business

• It operated a daily average of 13,523 passenger trains in 2018-19.
• It includes 3,695 inter-city mail and express services.
• 3,947 ordinary short-distance-stopping “regional” trains.
• 5,881 electrical multiple units operated on suburban sections for intra-city passengers.
• The regional/sectional trains, with multiple stops, cater to short-distance journeys (an average of 111 km in 2018-19) and contribute maximum loss in passenger business.
• The inter-city mail and express services constitute IR’s core passenger business.
• It needs to be duly nurtured and developed.
• Within this category, only the upper-class portion will be of interest to private operators, due to flexibility in fixing fares.

Now, let’s analyse the implications of privatisation decision

The stated objectives are-

• 1) Reducing the supply-demand deficit.
• 2) Encouraging modal shift from air to rail.
• 3) Significantly reducing transit time.

Let’s analyse the issues with the objectives

1) Reducing the supply-demand deficit

• Passenger ridership on railways has almost been stagnant at 8,354 million in 2018-19.
• The Railways’s endemic capacity constraint has kept its share in the nation’s transport market steadily decreasing.
• Despite the demand for more trains, its seven high-density corridors stretched over 10,500 km remain clogged.
• Its stations and maintenance wherewithal are over-stretched.
• Speeds remain low and services far less than satisfactory.
• Rail travel demand far outstrips supply and remains set to further grow substantially.
• The steadily growing services sector continues to trigger high mobility and demand for passenger travel, generally in the upper classes.

2) Modal shift from air to rail

• Transfer of traffic to rail will depend on-
• 1) reduced journey time
• 2) the frequency of rail services
• 3) offering accommodation on demand.
•  Rail travel needs to appropriately match air and road services in terms of pre-board and onboard convenience, reliability, and speed.
• As it faces competition from budget airlines, high-capacity buses, and personal cars, IR needs to craft a concerted strategy to expand, accelerate and modernise its inter-city passenger services.

3) Reducing transit time

•  Freight, as well as passenger trains across the network, have remained stuck in slow tracks over decades.
• The “pilot project” of IRCTC-operated upscale “Tejas” train-sets clock virtually the same travel time as the older Shatabdis on these routes.
• On completion of the two ongoing DFCs by December 2021, and the contemplated up-gradation of existing Delhi-Mumbai and Delhi-Kolkata rail routes will see trains running at 160 km/h.
• Most other paths with mixed freight and passenger trains jostling for space and constrained by speed limits.
• This will lead to the new train-sets to be substantially under-utilised in terms of their potential, and at far below expectations of customers for faster and frequent services.

Issues

1) Absence of regulator

• An autonomous regulator, vital for the equitable and effective functioning of the private operators.
• It is not without a challenge that the private train operators will strive to provide value for money to passengers and ensure their profitability in an environment of a price war.
• So, the absence of an autonomous regulator is essential.
• Experience of the licensed container train operators with the Railways alone driving policy and settling disputes has not been encouraging.

2) Concessions issue

• A 35-year concession in an age of rapidly evolving technologies impacting design contours of train-sets as much as customer expectations raise plausible questions.
• Taking a plunge in 100 paths without first testing the waters on few selected sections is could also give rise to issues.

Suggestions

•  Some structural shifts in IR’s business management are now a clear imperative:
• 1) Segregating its passenger and freight businesses for focussed attention.
• 2) Restructuring the tariffs rationally and urgently.
• 3) Developing terminal infrastructure.
• 4) Leapfrogging the conversion of the existing dual-use high demand trunk routes into semi high-speed corridors.

Consider the question “What are the objectives of the recent move of the India Railways to invite the private investors to operate some passenger trains on selected routes? What are the issues railway’s passenger service faces? Suggest the measures to deal with the issues.

Conclusion

The result of the move would suggest the future path for the operation for railways. But it must ensure the level playing field to the private players to test the efficacy of the move.

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Source:

https://www.financialexpress.com/infrastructure/railways/private-trains-on-indian-railways-network-why-one-cant-ignore-several-red-flags/2025432/

Indian Railways has launched the process of opening up train operations to private entities on 109 origin-destination (OD) pairs of routes using 151 modern trains.

Practice question for mains:
Q. Indian Railways has been the lifeline of India’s growth story since Independence. Discuss various opportunities and challenges ahead of its privatization.

Why such a move?

• From a passenger perspective, there is a need for more train services, particularly between big cities.
• The Railway Board says five crore intending passengers could not be accommodated during 2019-20 for want of capacity, and there was 13.3% travel demand in excess of supply during summer and festival seasons.

Moving the paralyzed system

• The Railway Board has moved ahead with a long-pending plan, setting a tentative schedule for private train operations, expected to begin in 2023 and in 12 clusters.
• At present, scheduled passenger train services remain paralyzed during the COVID-19 pandemic, and various railways have been running only specials such as those for workers.

What is the background of the decision?

• The present bid is only for a fraction of the total train operations — 5% of the 2,800 Mail and Express services operated by Indian Railways.
• The overall objective, however, is to introduce a new train travel experience for passengers who are used to travelling by aircraft and air-conditioned buses.
• Without an expansion, and with the growth of road travel, the share of the Railways would steadily decline in the coming years.

Bibek Debroy Committee Recommendations

• Several committees have gone into the expansion and the modernization of Indian Railways.
• In 2015, the expert panel chaired by Bibek Debroy constituted by the Ministry of Railways a year earlier, recommended that the way forward for the railways was “liberalisation and not privatization”.
• It asked for entry of new operators “to encourage growth and improve services.”
• It also made it clear that a regulatory mechanism was a prerequisite to promote healthy competition and protect the interests of all stakeholders.

Why is the move significant for Indian Railways?

• For the Railways, one of the largest organisations in the country, operating not just trains for passengers and freight, but also social institutions such as hospitals and schools represents a radical change.
• It was estimated that a one rupee push in the railway sector would have a forward linkage effect of increasing output in other sectors by ₹2.50.
• Train services operated by Indian Railways cover several classes of passengers, meeting the social service obligation to connect remote locations, and adopting the philosophy of cross-subsidy.
• In more recent years, it has focused on revenue generation through dynamic demand-based pricing.

Private players will be game-changers

• Private operators are not expected to shoulder the burden of universal service norms, and will focus on revenue.
• Even the first IRCTC-run trains have a higher cost of travel between Lucknow and Delhi than a Shatabdi train on the same route that almost matches it for speed.
• So private operators would have to raise the level of their offering even higher, to justify higher fares, and attract a segment of the population that is ready to pay for this difference.
• The government would have to explain that it has monetized its expensive fixed assets such as track, signalling and stations adequately for the taxpayer, who has paid for them.

Challenges ahead

• Several critical issues remain unaddressed. For one, there will be questions over the financial viability of some routes.
• Railways also tend to cross-subsidise passenger fares through freight revenue.
• This translates to below-cost pricing, which will make it difficult for private players to compete.
• On the other hand, higher fares needed to cover costs might bring them in direct competition with airlines, pricing them out of the market.

The Indian Railways has announced that it achieved 100 per cent punctuality of its passenger trains on July 1, a never-before feat.

Try this question:

Q.Discuss various issues crippling the punctuality of the Indian Railways.

A big achievement for Railways

• Usually, the Indian Railways run over 13,000 passenger trains and over 8,000 freight trains every day.
• It is important to remember the context – very few trains are running now, and the punctuality of the Railways can hardly be compared with its own performance on this count in pre-COVID times.
• The 100 per cent punctuality has been achieved when the network is running just 230 passenger trains – along with about 3,000 loaded freight trains and 2,200 empty ones.
• This is no mean achievement – it is indeed not an easy task given all the constraints that the Railways usually face while running a train on its designated path and time slot.

Why do trains get delayed in India?

• There are a number of reasons, which is also why the achievement of the Railways is significant.
• There are unforeseen situations such as a failure of assets like the signalling system and overhead power equipment.
• Several types of breakdowns can occur, related to rolling stock, tracks, etc., that make a train lose time along the way.
• Then there are external unforeseen problems like run-over cattle and humans, agitations on the tracks, and the like.

And what have the Railways been doing right?

• The maintenance of tracks was carried out in a quick time during the COVID period in various critical sections, so the average speed increased, and stretches of slowing down were minimized.
• Better and modern signalling is also making an impact.
• Another reason is better planning and operations analysis.

How do the delays impact the overall system?

• In normal times, these failures take away a lot of scheduled time when the train is detained even for a short time because making up the lost time during the remainder of the journey is a tricky business.
• It’s not as though a train can just run faster to make up for a lost time. In a network chock-a-block with trains, a train hardly ever has such leeway built into its pre-set path.
• Any train that gets delayed inordinately due to whatever reason during the journey theoretically eats into the “path” – or time slot allotted on the track – of another train.
• It then becomes a matter of which train to prioritise. Conventionally, Rajdhanis and premium trains get priority of path over ordinary mail/express trains.
• Freight trains, whose runs are not exactly time-sensitive, are usually held up to make way for passenger trains.

But why do the Railways have to juggle operations in this way?

• It’s a constantly dynamic scenario in which railway operations professionals take calls all the time.
• At the heart of the problem are network capacity constraints. It basically means that there are more trains than the network can handle in a given time bracket.
• Around 60 per cent of all train traffic is on the Golden Quadrilateral, even though it represents just about 15 per cent of the total network.
• There are projects to enhance capacity by building additional lines and modernizing signalling systems, etc.

Minimizing the delays

• The Railways are working on what is called a “zero-based timetable”.
• In this concept, which is to be introduced soon, every train that enters the network is justified based on needs and costs.
• It is expected to make train operations more seamless.