Indian Railways on a modernisation drive
The Modi government has made no secret of its fascination for big plans aimed at the modernisation of Indian Railways (IR) – be it the high-profile but delayed bullet train project between Mumbai and Ahmedabad, the commissioning of hydrogen-fuelled Vande Metro or the introduction of modern and semi-high speed, premium trains like Vande Bharat Express, Tejas Express, and Humsafar Express, touching a speed of 160 kmph. The ambitious plans span a wide range of activity from the face-lifting of 200 railway stations and the construction of 100,000 km of new railway track over the next 20 years to 100 per cent electrification and enhanced safety.
The efforts have gained steam after the railway budget was merged into the Union budget in 2017. With political pressures to run new trains, start new routes and reduced fares easing, Indian Railway has accelerated the pace of various projects, inking big ticket deals that involve collaboration.
According to reports, about three dozen hydrogen-powered trains are expected to be announced soon. Whether they will find a mention in this year’s budget or not is not known, but Prime Minister Modi has made it known that he wants the Railways to be a big part of India’s green initiative. Keeping in line with that idea, there are also plans to first introduce India’s first hydrogen-powered Vande Metro. The hydrogen-fuelled city train is going to turn the global focus on the Indian Railways as such a train has so far been built only in Germany so far.
If the use of hydrogen to power trains catches on, it will be a big achievement, as it would save a lot of fuel and cut down pollution. Although the exact date of the launch has still not been revealed, Ashwini Vaishnaw, minister, Railways, has said that the design should be out anywhere between May and June 2023.
Net zero goals
In any case, the Railways by phasing out diesel locomotives is getting closer to its ‘Net zero mission’ and climate change mitigation goals. Over 80 per cent of the broad-gauge network has been electrified. Last fortnight, it placed a $3-billion order for 1,200 electric locomotives of 9,000 horse-power with Siemens Mobility. This was the largest such order in the company’s history.
Siemens Mobility will design, make, commission and test the locomotives. Deliveries are planned over an eleven-year period and the contract includes 35 years of full service maintenance. The locomotives will be assembled in the Indian Railways factory in Dahod, Gujarat. Maintenance will be performed in four railway depots in Visakhapatnam, Raipur, Kharagpur and Pune. Locomotive assembly and maintenance will be implemented together with the railway staff.
Clearly, two sets of rationale – economic and political – are guiding the functioning of the Indian Railways. The organisation is considered to be the lifeline of the nation with over 12 million empoyees, 22 million passengers and over 21,000 trains plying on a network of over 65,000 km of broad-gauge network. Whatever progress it makes impacts the nation’s economy. The political logic stems from the fact that Railways is still the most popular and cheap mode of travel in India. More punctual, faster and clean trains will fetch political dividends as passengers will immediately value the changes.
Multiplier effect
The government’s economic rationale for the modernisation push is that capital expenditure on Railways has a huge multiplier effect on the economy. Take the introduction of Vande Bharat Express train, India’s first indigenously built semi-high speed train with enhanced passenger amenities and air purifier systems. It was designed and made by the government-owned Integral Coach Factory in Chennai.
The government intends to introduce 400 Vande Bharat trains during the next five years. The target is also to replace the conventional coaches of all express and mail trains with LHB (designed by German firm Linke Hofmann Busch) and other modern Indian-made coaches.
Vaishnaw explains the government’s plan for 400 Vande Bharat Express trains, which will eventually change the overall experience of every traveller. “It is for the benefit of each and every citizen of our country travelling by railways,” he says. “The vision is clear. First and foremost, the passenger experience will change without being an extra burden on them. This sounds like a difficult task, but we shall achieve it. Secondly, safety has to be paramount. Thirdly, clearly, we have to fundamentally change the technology that we had for 50-60 years. Technology is one of our key aspects and we shall change it totally. These are the three basic things on the passenger sides that we have drafted.”
Job opportunities
“The Railways spend about Rs6.6 crore on the making of one coach of the Vande Bharat Express train, which are set to replace the Shatabadi Express trains (which connect major cities) and Rajdhani Express (which offers sleeper services from New Delhi to major cities),” explains a Railways official. “So, one can roughly estimate the total cost incurred on rolling out the second fleet of 400 new Vande Bharat trains, which will be introduced in the next five years.
The government will have to earmark at least Rs80,000 crore just for manufacturing these coaches. Among other things, it will generate business opportunities and new jobs (or sustain the existing ones). Faster travel will result in saving of time.” The Railways is also aiming to make and export trains to markets in South America, Africa and East Asia by 2025-26.
As part of the budget, the Indian Railways has sought the government’s nod to meet its target of replacing conventional coaches of all express and mail trains with Indian-made and German-developed LHB coaches.
“There is an immediate target of making at least 5,000 LHB coaches and more than 60,000 wagons in the next few years, as part of increasing the rolling stock. We hope that financial support will come to us for making about 1,000 Vista dome coaches and other specially-designed wagons for automobile carriers as part of Rolling Stock Programme 2023-24,” informs an official. The Railways has also planned to install a new air purifying system in all trains, like one that has been installed in the coaches of Vande Bharat trains.
New coaches
While the new coaches will be built by the ICF in Chennai, private players will come in at a later stage. In September 2022, for instance, the Railway Ministry announced the floating of a tender inviting industry to set up a facility to produce forged steel wheels for Vande Bharat trains. SAIL, Bharat Forge and Ramakrishna Forgings in collaboration with Titagarh Wagons, are now in the race to manufacture the wheels to reduce dependence on imports.
However, there have been disappointments as well. A move to get private players to run trains did not attract enough investors due to lack of proper structuring of the proposal. This was admitted by Amitabh Kant, CEO, NITI Aayog. Also, following an uproar over the modernisation of railway station by private players under the PPP mode, the Railways minister had to clarify in December that “government has taken a clear and firm stand that railways will not be privatised, the issue has been approved at the cabinet level.” The railway station project is not being taken up under engineering, procurement and construction (EPC) mode.
However, the ministry of railways has been asked to expedite monetisation of other assets, including trains, goods sheds, hill rail, stadiums, railway colonies and railway land parcels among others, which also hasn’t attracted enough interest. The likely realisation from asset monetisation of Indian Railways assets under NMP (National Monetisation Pipeline) in the current fiscal has been now estimated at Rs4,999 crore.
Running fast or semi-fast trains is one thing, ensuring safety is another. Railways experts are of the view that Budget 2023 should focus on upgradation of tracks to the 160 kmph speed potential on priority. “Make tracks ready for 160 kmph on select routes so that safety is ensured and Vande Bharat train sets’ speed potential is leveraged. Also, more importantly, get average speeds to 100 kmph,” says G. Raghuram, principal academic advisor, National Rail & Transportation Institute (NTRI).
Safety factor
Indeed, in any modernisation process, safety has to be paramount. The Railways recently floated tenders to induct self-propelled Ultrasound Detection Systems to eliminate train derailment due to rail fracture. Currently, the Railways does not have any of these modern flaw detection systems and totally depends on manually operated ultrasound detection machines. There were at least 35 derailment cases during 2022 and an equal number of cases were reported in the previous year as well. Moreover, a total of 55 derailment was reported in the pre-Covid days in 2019-20, due to track defects.
The Rs1,000 crore tender is floated to acquire seven vehicular ultrasound detection systems, with a number of major players from Australia, the US and the UK showing interest in it. It is estimated that each vehicle will cost Rs130 crore, this cost covering both the operation and maintenance of the vehicle for the next five years.
However, this is not the first time that the Indian Railways has made an attempt to acquire these sophisticated systems. The first attempt was made back in 1985, but several issues with the self-propelled machines stalled the process back then. Then, in 2005 also, a vehicular ultrasound detection system was brought but it failed to deliver the desired results. Now that all the issues have been resolved, the authorities are hopeful of a successful introduction of the self-propelled ultrasound detection machines on the tracks.
Budgetary support
Keeping the government’s ambitions in mind, there is a buzz in official circles about the finance ministry coming up with a record budgetary support for Railways this year to boost its infrastructure. The railway ministry expects total capital expenditure to rise more than 20 per cent to exceed Rs3lakh crore in 2023-24, as against Rs2.45 lakh crore capex in the current fiscal year. This year’s capex will mark an increase of 17 per cent over revised estimates for the year 2021-22.
In the face of such modernisation efforts, how has the Railways performed during the year? For one thing, there has been a jump in both passenger and freight revenues. Its estimated total earnings in the passenger category on an originating basis for the period of the first nine months of 2022-23 come to Rs48,913 crore – a growth of 71 per cent over Rs28,569 crore generated during the year-ago period.
The total number of passengers booked in the reserved passenger segment from 1 April to 31 December 2022 is about 596 million – up from 560 million during the same period last year – a 6 per cent uptick. When compared to the same period the previous year, the revenue from the reserved passenger segment climbed by 46 per cent from Rs26,400 crore to Rs38,483 crore between 1 April and 31 December 2022.
The overall estimated number of passengers booked in the unreserved passenger category from 1 April to 31 December 2022 is 402 million – up 137 per cent from 170 million during the same period last year. The revenue made from the unreserved passenger sector from 1 April to 31 December 2022 is Rs10,430 crore, which is a 381 per cent growth over Rs2,169 crore made during the same period of the previous year.
Additionally, the freight earning until December of the current fiscal was 16 per cent higher than what was during the same period the previous year. In the first nine months of 2022-23, the Railways made Rs1,20,478 crore – a growth from Rs1,04,040 crore made the previous year. A total freight loading of 1,109.38 million tonnes was reached from April to December – up from 1,029.96 million tonnes in the previous year (an improvement of 8 per cent). For the first nine months of 2022-23, railway freight loading has topped the previous year’s loading and earnings, according to the department.
Hungry for cargo
Indian Railways said it aims to attain 2,000 million tonnes cargo by 2023-24 after reaching 1,400 million tonnes in the current financial year. This follows the adoption of the mantra ‘hungry for cargo’, under which IR has made sustained efforts to improve the ease of doing business as well as improve the service delivery at competitive prices which has resulted in new traffic coming to railways from both conventional and non-conventional commodity streams. Last year, on 6 December, the Railways touched a major milestone in freight transportation by crossing 1,000 million tonnes mark, as against 926.4 million tonnes during the same period last year.
Coal, the biggest commodity the Railways transported, contributed 485 million tonnes in this 1,000 million tonne mark till 6 December, notching a 14.25 per cent improvement. The second biggest contributor to incremental volumes this year has been the ‘balance of other goods’ segment comprising a basket of commodities like stone, ash, bauxite, metals, automobiles, gypsum salt, salt, etc.
Vaishnaw attributes the transformation going on in the national transporter Railways to Prime Minister Modi. He recently told a TV channel: “PM Modi will ask you a question which is so much connected with the actual operations on the ground that will make you feel that ‘I should have been more prepared.’ So, I can say we have a tough boss.”
“The prime minister had given us a target of 200 stations. We created a masterplan for modernising 139 of them, such that the growth of the city gets improved because of the station, not stymied. When we went to the PM with the first 50 of these, he took a 2.5-hour meeting, and then he didn’t approve it. He called me later and said, ‘This plan is good for today. We need a plan for the next 50 years.’ It took me some time to understand PM’s thought process – how far he is thinking. We had to completely destroy the plan that was created earlier and then it took some of the best architects and town planners, who sat in long workshops, to plan for 50 years.”
With Modi clearly micromanaging the affairs of the Railways, a lot is now at stake for his reputation – and the reputation of the Railways as well.