Railway Business Plan: Big, but not off with a bang

Minister of Railway, Suresh Prabhakar Prabhu, has announced the Railway Business Plan 2017-18. The plan aims to increase the share of freight, and includes long-term agreements with bulk movers, double stacking of small-size containers, introducing roadra

Sachin Bhanushali CEO & Director, GatewayRail

Indian Railway has prepared an annual business plan and shared it in public space for the first time. This indeed is a laudable effort. Further, initiatives taken by Indian Railways as part of the Business Plan for 2017-18, such as introducing dwarf containers for double stack movement under wire in electrified territory and for Roll-On-Roll-Off (Ro-Ro) for transportation of laden trucks by rail over critical and congested sections are also very good initiatives. However, the potential of these initiatives has not been assessed and established convincingly. Also, even with a good potential of these two initiatives, the contribution of these segments of business in IR’s overall revenue is likely to be only marginal. Transportation of light and voluminous cargo in double stack formation of dwarf containers will improve throughput per train as compared to that in single stack operation in conventional ISO type containers. However, it may be a little challenging to get similar business for return haul leg of the transportation cycle.

Further, Indian Railways have a very limited fleet of the specialised low-bed rolling stock for transportation of laden road trailers. Therefore, general purpose wagons like BRN which are used for transportation of iron and steel will have to be used for Ro-Ro operations. The RO-RO concept is primarily targeted at reducing congestion and pollution in NCR region and move towards greener transportation option. The road railers are still at experimental stage and their success depends on Indian Railways’ ability to develop adequate switching terminals and large private investment to develop the trade route with good potential for regular cargo movement with adequate switchable rolling stock. We will have to wait and see the success of these initiatives to bring about a modal shift in transportation sector.

Manish Puri MD, APL Indialinx

While these are good initiatives per se, I do not feel that they have been fully thought out in terms of impact as well as their likely impact on the overall freight situation. For dwarf containers, there is still no commercial tariff available with container train operators, and it will take four to six months to even begin the process of deploying these after manufacture etc. Similarly, for Ro-Ro in NCR at present, only local movement/small trucks can be moved, and the pricing offered is more expensive than road movement even after payment of the green tax. The railways seems to be in a hurry to introduce new ideas, which is a good thing as it indicates clearly that the intent to improve freight movement is in place. It is equally important however, to fill in the necessary details as well as keep contact and dialogue open with investors and private operators to take these ideas to success.

N.Ramakrishna General Manager (Marketing & Sales), Kribhco Infrastructure

The Ro-Ro service is a boon for Delhi as it would have a direct impact on its air ambient quality and the capital would breathe clean air as the Ro-Ro service aims to reduce carbon emission and congestion on the roads of NCR as about 66,000 diesel-guzzling trucks pass through Delhi and its adjoining areas in a day. According to Railways, there are about 20,000 trucks which are not meant for the NCR, but enter the region to travel further. There are eight entry/exit routes in the NCR which will be utilised for Ro-Ro service to take trucks off the road. It is a win-win situation for truckers as well as for railways as goods will be transported in safe and faster way, saving cost on diesel and man-days besides reducing the pollution level. The bottle neck in the Ro-Ro service for CTOs is unavailability of a Railway land where the trucks can be loaded and off loaded. The revenue model is not suitable on long term for CTOs.

Amit Kumar Director, Pristine Logistics

The Indian Railways is, in many respects, at an inflection point, especially in the backdrop of the merger of its Budget with the general Budget of the country. The sector needs to innovate to recover some of the business that it has lost to road. The recent announcements, especially with respect to dwarf containers have tremendous potential. These announcements, of course, are at an ideational stage right now and needs to be followed up with realistic schemes that can attract cargo. The good news now is that the Indian Railways is now dialoguing and no longer working encased in its own version of reality. We look forward in participating and partnering the Indian Railways in this growth of opportunities arising out of this new thinking coming out of the establishment.