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Vol.
XXVIII No. 11
March 14,
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Making
The Railways Sick:
The
Flip Side Of India Shining
Prabir
Purkayastha
IN
the huge ad campaign that the Vajpayee government has run, now declared partisan
and stopped by the Election Commission, there was no talk of the railways. The
state-owned Indian Railways carries 11 million people daily and hauling a
million tonnes of freight over more than 100,000 km of tracks and 63,000 km of
lines, making it the second largest railway network in the world. It is the
lifeblood of the Indian economy and the mainstay of the overwhelming majority
people for long distance transport. In spite of this, not only has Indian Railways been run down to the
ground, with finances going towards bankruptcy, but is also now becoming
increasingly unsafe for the travelling public. For the first time in the last 55
years after independence, the accidents in the railways are on the rise.
NEGLECT
OF RAILWAYS
Increasingly,
the railway structure is coming apart with more than 500 bridges on the sick
list and about 16,000 kms of tracks in urgent need of renewal. With
the continued neglect of railways, the import bill of oil for road transport is
soaring with more than 40 per cent of Indias export going to pay for import
of petroleum alone. In spite of the railways being 4 to 8 times more energy
efficient than roads, the NDA government has starved the railways of investments
and driving it sick.
For
the first time in its history, the railways did not pay the government of India
dividend in 2000-01 and 2001-02. Though they have paid dividend after that, the
railway budgets for 2003-04 and the truncated budget 2004-05 shows the decline
of money available for safety, augmenting capacity and other investments.
Instead, money is being squandered in politically motivated re-organisation and
creation of new zones —
the creation of seven new Railway zones against the explicit advice of Railway
Boards. The Railways’ operating ratio has also declined: in 2003-04 it stood at
92.6 per cent compared to 82.5 per cent in 1995-96, making it increasingly
unviable without budgetary support. The investments in railways have also
declined from 10.3 per cent of the total Plan outlay in the 4th plan to 5.3 per
cent in the 9th. The share of the railways in the total transport outlay has
also declined from 53 per cent to 37 per cent in the same period.
Even
worse, the railways have neglected passenger safety in a big way. After the
steady decline of accident rate per million train kilometres from 5.5 in 1961 to
0.57 in 1996-97, the figure has been rising and currently stands at 0.65. An
estimate made last year showed that at least 50,000 of India’s bridges date back
to the 19th century. Further, minister of state for Railways Bangaru Dattatreya
admits that an alarming 526 are ‘distressed, another way of stating that they
are dangerous. At least 35,000 coaches and goods wagons need to be retired. For
tracks the estimates vary — from 16,000 km to 12,000 km of tracks are
suffering from metal fatigue and need urgent replacement. The track renewal and
maintenance are being delayed; railway tracks with cracks and problems are being
left unattended for long periods. All these have manifested in higher accidents
and rising passenger deaths. Finally, after postponing safety for years, the
government has now agreed to fund track safety in the coming years with special
fund, promised to be of the order of Rs 17,000 crore. It remains to be seen
whether this is another pre-election promise or will be actually forthcoming.
Obviously,
the starving of funds to railways is not only threatening the life of the
passengers it is also making it less competitive in comparison to road
transport.
While the road sector has been encouraged by large investments in expressways,
access controlled highways, etc, similar investments in railway tracks have not
been forthcoming. This will lead to a further shift of traffic even more to
road, with railways left only with the loss making bulk freight and passenger
traffic.
PROBLEMS
GALORE
The
freight is the key to the railways being financially viable. Freight contributes
to two thirds of the revenue while utilising only 50 per cent of the capacity:
freight subsidises passenger traffic. The problem is that while the Railway
minister is only interested in running new air-conditioned luxury trains for the
rich, no attempt is being made to tap into the high cost freight items, the fast
moving consumer goods. The focus is still on bulk items for which the freight
rates are either constant or being lowered. With the high cost items moving to
roads, the railways is losing out on its enormous reach and capacity to reach
every part of the country economically.
The
railways today carry 45 per cent of the total freight in the country including
89 per cent of the 8 major bulk commodities — coal, steel, petroleum,
fertiliser, cement, food grains, iron ore and raw materials to steel plants —
which constitutes the core sector of the economy. The high-density corridor
connecting the four metros, Delhi Mumbai, Chennai and Kolkata the Golden
Quadrangle — comprises 16 per cent of the network and carries 65 per cent of
the freight traffic and 55 per cent of the passenger traffic. This is already
saturated and unless augmented substantially, will lose out to road sector,
which is being upgraded with great fanfare. Apart from this, the problem is,
that while the high volume low cost items are using the railways, the low volume
high cost items are shifting to road transport. If freight is to subsidise
passenger fares in the country, the railways have to be competitive in terms of
delivery and being customer oriented for competing with road transport for such
items. Wherever the railways have made this attempt they have succeeded; the
problem is that not only is there no focus in the railways on this, the NDA
government is actively discouraging the railways of such a focus. Obviously,
unless the railways augments its capacity of the high density traffic corridor
and focuses on also the fast moving consumer goods sector, it will become
permanently sick.
MAKING
A CASE FOR
PRIVATISATION
The
NDA governments policy in privatising infrastructure and the public sector
undertakings is first to run them down to the ground: no new investments are
made or allowed, key personnel posts including chairman are not filled up,
lucrative areas kept outside their purview, etc. Once these organisations are
financially in the red, the BJP ideologues start talking about need to attract
capital flows and induce competition in the sector. Once the private
sector enters the field, the public sector/state sector is then tied hand and
foot in competition to the private sector. Then with the sector further into
red, the argument is trotted out that there is not alternative to privatisation
and handing over huge assets at a pittance to the private sector. This is the
trajectory that the NDA government has followed, both in telecom and the power
sector. BSNL was allowed to enter cellular market only in 2002, after seven long
years of waiting. The power sector is being made bankrupt and its large assets
handed over to the private sector in bits and pieces. The Indian railways is
also now targeted and being rendered uncompetitive. Soon, the cry will come that
we should privatise it like the British Rail. Of course, it will be glossed over
that privatisation of British Rail has meant rising failures, accidents, and
complete anarchy, leading to a rapid shift to road transport for both freight
and passenger traffic. This is the model that we seem to be following for Indian
railways as well under BJP aegis.
