Indian Railways in 2024 (Part II): Freight (Un)Loading, Safety Misses and IRMS derailed!

https://anindecisiveindian.blogspot.com/2024/12/indian-railways-in-2024-part-1-track-of.html

☝️ Part I of this blog, which incidentally did not receive a great responses, ended with the following :

Is this pattern of financial performance and high levels of investment sustainable? No government in India would be willing to raise passenger fares, as such a move would be politically disastrous. Can expenses be reduced? To some extent, but this would require a paradigm shift in IR’s operational and maintenance model—a shift that has yet to show any serious resolve. Additionally, nearly 70% of IR's expenses stem from salaries and pensions, making cost-cutting particularly challenging.

So, what is the way forward to ensure IR's long-term sustainability? Should IR take inspiration from the bard’s timeless advice, as Polonius cautioned Laertes in Hamlet: "…Neither a borrower nor a lender be; for loan oft loses both itself and friend…"? Certainly not entirely—after all, how else can IR fund the investments crucial for its growth? The real challenge lies in striking the right balance: prudent use of grants and borrowings, meaningful investments, efficient spending, and boosting earnings. 

We will explore this conundrum and some other aspect of Indian Railways’ (IR)  performance in this, part II, of the blog.

A significant increase in passenger revenue has occurred due to a larger deployment of high-end trains and AC coaches following a good strategy some years back to manufacture only AC coaches as strategy to move towards a developed country. However, this was done without any thought about teeming millions in India who travel in non-AC Sleeper and overcrowded General coaches. The reduction of General and Sleeper coaches led to widespread backlash from passengers and this thoughtless action sparked a big controversy, especially after 2023. This prompted a knee-jerk reaction from IR to reverse course, focussing instead on manufacturing and deploying more lower non-AC coaches. This in turn is another goof us as the AC manufacturers who had installed higher capacities were left stranded, requiring to retrench workers with sharp decline in orders.

The writer holds a steadfast view: for India to attain developed-country status by the end of Amrit Kaal, it must ensure that lower-income passengers no longer endure travel in overcrowded, uncomfortable coaches. The solution lies in offering these passengers dignity and comfort by transitioning nearly all trains to air-conditioned (AC) coaches, except for one or two non-AC long-distance trains per route to accommodate very poor migrants or those who do not want to travel in an AC coach. This, combined with an increase in the number of trains and coaches, must be achieved without a significant hike in fares. 

Do you see a paradox here? Possibly. But it is a necessary one, as every Indian deserves to travel with dignity. While this approach may initially strain railway revenues, it opens the door for gradual fare adjustments in step with rising national prosperity, enabling the common man to shoulder the cost more easily. Unfortunately, the current policy flip-flops reflect a lack of vision for improving the travel experience of the everyday passenger. Additionally, a more empathetic and collaborative relationship with equipment and component suppliers—currently lacking—is essential to achieving this transformation.

On the other hand, therefore, it is obvious that IR must significantly increase its revenue from freight traffic. However, IR's share of the freight market continues its downward trajectory, currently standing at a mere 26%, with other modes—primarily road transport—holding the dominant 74% share. IR continues to operate under the belief that the freight market is supply-driven, hoping that the induction of more wagons, higher-powered locomotives, and network improvements such as Dedicated Freight Corridors (DFCCs) will drive incremental traffic. Unfortunately, this strategy has not yielded the desired results.

Despite having more than 1.5 times the number of locomotives, and combined traction power being double what it was a decade ago, the number of passenger trains has scarcely increased. However, key performance indicators such as locomotive utilization, specific energy consumption, net tonne kilometres (NTKM) per wagon, and average speeds have shown no meaningful improvement—and, in fact, have declined. This stark contrast highlights the inefficiencies in IR’s approach and underscores the need for a more strategic and focused effort to reclaim its share of the freight market.

The National Rail Plan (NRP) aims to increase IR’s freight modal share to 45% with a view to improving the national logistics costs from the current 13/14 % to around 8%. As a precursor, Mission 3000 MT was launched in 2022, with the goal of achieving 3000 MT in freight loading by 2027, up from the stagnant 1400-1500 MT range. Key initiatives under this plan include expanding the wagon fleet, reducing maintenance intervals, enhancing yard facilities, fast-tracking capacity enhancements, reducing freight transit times, completing Dedicated Freight Corridors (DFCs) by 2024, identifying new DFCs, achieving 100% electrification, and increasing the number of electric locomotives.

Mission 3000 MT, along with the Prime Minister’s Gati Shakti initiative, also emphasizes private sector participation in rolling stock operations and ownership, the development of multi-modal freight terminals, and increasing IR's share in transporting rapidly growing Balance Other Goods (BOG), which currently accounts for a mere 4% of total freight. The goal is to attract an additional 500 MT of traffic by addressing key rail infrastructure constraints. In the last two years, the incremental loading should have been around 500 MT. Instead, IR achieved only a modest increase, reaching 1591 MT in 2022-23, up from 1418 MT in 2021-22—representing a significant shortfall. While standard bulk commodities, except for foodgrains, showed some organic growth (ranging from 3% to 8%, with iron ore seeing a healthy 13% increase), the biggest setback remains IR's share of BOG, which constitutes 50% of India's total transportation market. IR's share of this segment remains stubbornly below 5%. Ironically, what saves IR from even worse performance is the unexpected surge in coal movement as the green energy targets were not met by the country and IR, which otherwise tries to fashion itself as a ‘green’ railway, benefitted by carrying more of this most polluting commodity.

While the eastern DFC, albeit truncated up to Sonnagar, has been completed, the last leg of the western DFC to JNPT is still far from being commissioned. Though train operations on DFCs have seen improvements in average speeds and transit times, both DFCs are operating at less than 50% of their planned capacity, contributing no significant increase in IR’s freight loading. The expected improvements were largely based on carriage of fresh traffic, which has yet to materialize. Moreover, there has been a lack of imaginative policy initiatives, such as freedom of pricing at the zonal or divisional level, the deployment of dedicated wagon designs for new traffic, and increased participation of private operators. Without these measures, IR's freight ambitions are unlikely to be fully realized.

Summarizing, investments have still not brought growth of IR’s loading and revenues and it is inevitable that a granular analysis be done and more holistic approach be adopted based on strong but flexible pricing initiatives, greater functional freedom and partnership all stakeholders including private sector. 

Indian Railways Management Service (IRMS): The Indian Railway Management Service (IRMS) was envisioned four years ago as a transformative move to unify eight distinct railway officer services into a single cohesive entity, aiming to banish the specter of departmentalism that long hampered its functioning. However, a lack of clarity and purpose in its implementation quickly exposed significant cracks in this ambitious vision. After a series of policy U-turns, the government appears to have come full circle, reverting to officer recruitment through the Civil Services Examination (CSE) and Engineering Services Examination (ESE)—essentially old practices dressed in new rhetoric. Four years of muddled uncertainty have left Indian Railways back where it started, with the lofty goal of dismantling the entrenched silo mentality seemingly abandoned, except for the occasional nod to it in official pronouncements.

Safety: Railway accidents frequently make headlines, sparking two predictable yet polarized narratives driven by political leanings. On one hand, IR cites data showing a reduction in accidents and fatalities since 2014, and of late, often attributing mishaps and near-misses to sabotage. On the other hand, the opposition argues that accidents have surged because IR prioritizes glamorous projects like Vande Bharat trains and glitzy stations over passenger safety. Both narratives, however, fall short of capturing the complete picture.

Accidents have indeed decreased over the last decade but this is not solely the result of the current government's efforts but is part of a long-term works by successive governments. Major steps include eliminating unmanned level crossings, upgrading track maintenance, modernizing signaling systems, and replacing less safe coaches by LHB models. As for the sabotage angle, these cases do not seem severe enough to cause a derailment, and some involve juvenile mischief or criminality rather than grave sabotage. While a few serious incidents may merit concern, lumping these together with minor obstructions or vandalism only serves to stoke panic. Investigating agencies like NIA, are looking into potential sabotage and they have not found any evidence of the same so far; we should wait for their findings before jumping to conclusions. 

In any case, comparing today’s accident rates with the past is a misplaced approach. Technology is now available to achieve near-zero accidents, and that should be the goal. Given the hike in the capital budget with nearly 25% of the central government’s Capex going to IR—funding is not an issue. The challenge lies in focus and execution of projects such as Kavach signalling system and use of AI for capturing all near misses and then acting strongly on all alerts.

A case in point is slow rollout of Kavach. Despite trials on the SC Railway nearly three years ago, the system has yet to expand beyond its initial tests. IR cites limited industrial capacity as a reason for the delays; a poor excuse because if capacity is insufficient, it is IR’s responsibility to foster investment and capacity-building. Meanwhile, if IR is not confident of Kavach’s reliability, it should adopt the proven European Train Control System (ETCS) Level II on key routes until Kavach fully matures. It is ironic that while IR drags its feet, the Ministry of Housing has implemented an advanced version of ETCS Level II for its RRT trains. A clear roadmap for Kavach coverage with annual targets is lacking. While trials for the next version, Kavach 4.0, is publicized, the current system is not fully operational anywhere, including SC Railway, let alone on Delhi-Howrah and Delhi-Mumbai routes which were sanctioned long back. IR’s vague goal of nationwide rollout by 2030 is neither reassuring nor realistic.

Big-ticket projects: We are relentlessly inundated with updates touting the percentage completion of high-profile projects, yet most remain ensnared in chronic delays. Whether it’s the Dedicated Freight Corridors (DFCs), the J&K rail line, Vande Bharat sleeper and other variants, the High-Speed Rail (HSR),  elimination of train waiting lists, the Pamban bridge, station redevelopment initiatives, track upgrades for 160 kmph operations, export strategies and what not—none seem to escape this cycle of procrastination. A closer inspection of successive announcements reveals a glaring reality: firm completion dates are either conspicuously missing or wistfully tied to deadlines that are already a distant memory.

We will talk about some big ticket project in the concluding part III of the blog. But beware, recalling Helena from the bard’s All’s Well That End Well, “...Oft expectation fails most and most oft there Where most it promises, and of it hits Where hope is coldest and despair most fits”, we may be worse off, with expectation getting belied in both hopeful and hopeless situations.

…

(to be continued)