IR: Enhancing efficiency, developing capacity
Considered as a major driver in the industry growth, Indian Railways has always managed to extend the reach for movement of both cargo and passengers. Arunendra Kumar, Chairman, Indian Railway Board talks to CARGOTALK about the initiatives and steps taken
Railways is now focusing on logistics parks and CONCOR has been told to set up international level logistics parks and they have taken it up as a priority Because of the Delhi Mumbai Industrial Corridor coming up, we expect to see development of a lot of small hubs where we can make a train load and join the stream or unloading can also be done
100 per cent FDI and privatisation is a welcome step which can bring in a lot of investment with technology up gradation. What big advancements are we expecting in this direction?
100 per cent FDI is a new initiative taken by the current government, which has opened the complete railway sector in all its three aspects, i.e., operations, construction and maintenance and include electrifica- tion, signalling, tracks, port connectivity along with hi-speed lines and rolling stock manufacturing. The purpose is that we need growth in these areas and we don’t have that much of money to invest. So, the purpose of opening is also that if anybody else is willing to invest, they could do so and have a share in the profits and returns. So far, as per the FDI Policy, we were supposed to do everything ourselves in the Rail sector. Now we can involve the private sector – both domestic and foreign to invest through a company or equity route in projects which are in the interest of the country. We had one Investors’ Meet on December 5, 2014 and another one we will have in January end followed by on in February end. Investors will have to do their own due diligence, but it is necessary to understand as to what are the benefits for both sides in this area.
Due to the lacklustre performance of the railways, the share of Indian Railways in cargo traffic is steadily decreasing. Has the Railways taken this factor into account?
This fear always remains when you increase the price of the freight that you will lose more from the Railways to the road sector. We are, by and large, neither increasing nor decreasing in the freight traffic because there is so much to carry in the seven major commodities.
Major steel producers have switched to roads because of issues like cost, service and connectivity. How do you plan to capture the traffic on the Western Coast?
These plants are also taking lot of raw materials via Railways. Finished goods may not be coming because that depends on where they have their market for selling their products. It also depends on what connectivity they have got and the amount they can handle because Railways is the cheapest and efficient mode of transport for beyond 400 kilometres. They come to us depending on where they want to send finished products or for movement their raw materials; for short lead steel traffic they use other modes of transport, but for raw materials they use the services of railways.
State-owned railways, which have a monopoly on the provision of goods wagons, are failing to provide sufficient wagons to service the extra cargo in the Indian ports. How does the Railways plan to solve this long pending problem?
When a ship is berthed, a certain demand operates. But when demand rises, Railways have to balance the requirement of rakes for the various ports at that time. So it is quite possible that there is bunching of ships, difficulties of meeting the demand simultaneously do happen. But then we try and redistribute our freight stock to at least meet the need for evacuation. Sometimes due to the spurt in the receipt of shiploads, these situations happen, for example, imports of coal that have gone up as much as 50 per cent.
In transportation of nonbulk goods, the railways has been steadily losing out to the road sector. Are you planning to come up with any needbased innovative solutions to counter the same?
We are now focusing on logistics parks and CONCOR has been told to set up international level logistics parks and they have taken it up as a priority to try and set up mega logistics bases in the country. And a team of CONCOR officials has also been visiting Hong Kong and other countries to check the details to set up and check how big a logistics park should be for it to be world class and matching the biggest logistics parks in the world. That is our vision and that is what we intend to do. We expect that all related issues would start getting sorted out.
Rail connectivity to the hinterland spurs economic connectivity and is crucial for EXIM trade. What are your plans for reforming the existing rail logistics infrastructure to support the expected growth of freight?
With the freight corridor coming in, we will find lot of activity coming up regarding the hinterland connectivity because the Delhi Mumbai Industrial Corridor also has to come up. Because of the freight corridor coming up, we expect to see development of a lot of small hubs where we can make a train load and join the stream or unloading can also be done.
What are the challenges that the Railways is finding in bringing about improvement in its current infrastructure to meet the growing demand in the hinterland area?
The first challenge is funding. Cash crunch has always been the problem with the Railways. Second is that we need to prove our delivery, in the sense, that project costing and completion cost has to be more realistic and we cannot have open-ended spending. Projects get delayed and as they are delayed, more demands come up and as we have to agree to certain demands, the project cost increases further. We have to bring in more technology and expertise into our project delivery.
Every year, the Railways announces a policy revision for automobile traffic in the hope for better performance, but it has never succeeded. What are the amendments you intend to bring about in the policy?
We have changed but not at the speed we want to change, especially for automobile movement. We just have two rakes from the private sector and this definitely has to increase. Maruti has not yet invested much on rakes. But I hope they would like to because the first trial has already started and the second rake has also come and more rakes are to come so that road movement of these cars is reduced. It is slow; I don’t deny that, but gradually it is picking up.
Chairman, Indian Railway Board