Making The Railways Sick: The Flip Side Of India Shining

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 India’s 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 government’s 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.

14th March 2004