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Economy

Jun 15, 2006
A white elephant turns pink

On the anvil is a freight corridor, exclusively for freight trains. This will be a parallel of the highways but will be aligned to run through major industries. Railways are benchmarking themselves against China, a country comparable in size and growth rate. China’s trains run at 150 kmph and India’s at 25; China strings together 150 wagons per train and India, a mere 65. It is common for a goods train to stand aside to let as many as ten express trains. The exclusive freight corridor will change all that. Even though it will cost an astounding Rs.65,000 crores, freight volume growing at 15% per year will easily make that investment profitable.

Rising diesel prices have played to railroad’s advantage. 60% of a truck’s operating cost is due to diesel; for trains, it’s a mere 8%. As this article goes online, there has been another fuel price rise. The Railway Minister Mr Lalu Prasad Yadav, however has spun that to an advantage. While the truckers have to increase freight rates, the railways won’t, he says. Quite soon, all trains will go electric, he added.

Though it is freight that is more profitable, the passenger sector is not being ignored. The growing number of private airlines have not so much sucked away rail travellers as they have created a new market. Here too, rising fuel prices has increased the fare differential. Railways are also piling on friendlier service. Greater attention is being paid to cleanliness. Ticketing has become hassle free, trains tend to be reasonably punctual and their coverage is wider. For destinations that can be reached by an overnight journey, trains are the first choice.

Selective privatisation has added to railways’ profits and passengers’ convenience. Vast free spaces of stations are being turned into arcades for franchisees’ shops. Food courts, convenience stores, browsing centres, WiFi networks are becoming common. Recently the State Bank of India offered Rs 14.5 crores as license fee to locate 650 ATMs. Many consumer brands are likewise bidding for opportunities to sell to 5 billion annual foot-falls. Innovations are being daringly experimented with by the management team. Double decker trains for containers, ferrying loaded trucks over hilly terrains, growing jatropha in its wastelands to produce biodiesel for its use, setting up of its own broadband network along track-ways, inviting modern hotel chains to set up on its vacant lots are all initiatives one is not likely to associate with staid old Indian Railways.

It’d be churlish therefore, not to acknowledge that all these transformations are being brought about by our much reviled politicians and bureaucrats with nary a big-name consultant in sight.

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