From UPSC perspective, the following things are important :
Prelims level : Not much
Mains level : Paper 3- Privatisation of railways
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.
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.
- 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.
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.