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.

Arunen­dra Kumar

Chair­man, In­dian Rail­way Board

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