Recent Developments: Steps to move IR up the performance ladder

Steps to move IR up the performance ladder

August 2019

Indian Railways (IR) has consistently been stepping up its game in the past few years. A slew of initiatives have been introduced to facilitate IR’s digital transformation drive, improve passenger experience and increase the overall competitiveness of railways in the freight segment.

Indian Infrastructure provides a snapshot of the key developments in the past year…

Policy moves and major developments

  • The introduction of new policies and amendments to existing ones are aimed at improving IR’s functioning. One such scheme, the Generalised Purpose Wagon Investment Scheme, was launched in April 2018. Under this, IR opened up private investments in general-purpose wagons and in railcars that can move multiple commodities, including coal, without the need for any special approval. Further, in this regard, an amendment was introduced on November 16, 2018, that mandates that parties pay a per rake terminal access charge in case they utilise railway-owned terminals. Through this, IR plans to cater to the long-term demand of railway freight customers.
  • The Railway Board has introduced a new policy that allows companies to advertise on trains. The advertisements are limited to a 6×6 inch size and a maximum of four thematic products and equipment with courtesy signs on every coach. Initially, permissions for this will be granted by coaching depot officers for three months and will be limited to two trains in each depot.
  • IR has reviewed and rationalised the Flexi Fare Scheme based on the recommendations of the railways’ review committee, the Comptroller and Auditor General’s report, and representations from passengers. Upon rationalisation, 15 trains with an average monthly occupancy of less than 50 per cent throughout the previous year have been completely removed from the scheme. In addition, this scheme has been discontinued for 32 trains during lean months (February, March and August).
  • Under the Flexi Fare Scheme, in all classes, the maximum cap for dynamic pricing has been revised from the current cap of 1.5 times to 1.4 times. For improving the occupancy of the less patronised classes, a graded discount of 20 per cent will be provided on the last fare of all the trains with flexi fares and Humsafar trains where occupancy of a particular class is below 60 per cent. These changes will be implemented with effect from the advance reservation period which is currently four months.
  • In a much-awaited development, the central government inaugurated the 4.94 km Bogibeel bridge in Assam in December 2018. It is the first fully welded steel bridge, the longest rail-cum-road bridge in the country and the fifth rail-road bridge on the Brahmaputra river in Assam. It has been constructed by Hindustan Construction Company Limited in joint venture with DSD Brouckenbau GmbH, Germany, and VNR Infrastructures Limited at a cost of over Rs 59 billion. The bridge is expected to reduce the road and rail distance between Dibrugarh and Itanagar by about 150 km and 705 km respectively.

Tapping new sources of funding

  • IR has successfully completed intial public offerings (IPO) of RITES Limited, IRCON Limited and Rail Vikas Nigam Limited (RVNL) in June 2018, September 2018 and April 2019 respectively. While, RITES’s IPO was oversubscribed 67.17 times, IRCON’s IPO was oversubscribed 9.85 times and RVNL’s IPO was oversubscribed 1.83 times.
  • Besides, the Indian Railway Finance Corporation (IRFC) has raised $500 million via overseas bonds as part of its fundraising activity. The bonds were oversubscribed three times and carried an interest rate of 2.23 per cent for a period of five years. The funds so raised will help IRFC meet its extrabudgetary resources target. These funds form an important component of IR’s overall capital expenditure.

Passenger amenities and digital initiatives

  • The central government has launched the Rail Drishti dashboard, a digital initiative to promote transparency and accountability in IR. Through the dashboard, information from various sources will be categorised under 15 sections and can be accessed by anyone. Information on key statistics and parameters will also be populated on a single platform.
  • Apart from this, other digital initiatives include an SMS-based passenger complaint and suggestion system, an online vendor registration system, a geographic information system portal, a next-generation e-ticketing system, modern optical character recognition kiosk machines for printing of tickets, and a web portal called Rail Sahyog.
  • Meanwhile, RailTel has successfully deployed free Wi-Fi facilities at 1,600-2,000 stations under RailWire, a retail broadband initiative of RailTel that extends broadband and application services to the public.
  • The Ministry of Railways (MoR) has launched an all-India unreserved mobile ticketing facility. This facility allows the booking of unreserved tickets including season tickets and platform tickets. The booking of unreserved tickets for all non-suburban sections of all zonal railways has been enabled. It is available via a mobile application – UTSONMOBILE – on Android, iOS as well as Windows mobile devices. The mobile application accepts payments from all types of digital modes via payment aggregators along with the railway wallet – R-wallet.

Station redevelopment

  •  Another key initiative being taken by the MoR is the large-scale redevelopment of 600 stations to offer world-class infrastructure. In Phase I, work of redeveloping 42 railways stations is being undertaken. In October 2018, approval for the redevelopment of 13 railway stations was given by the nodal agency, Indian Railway Station Development Corporation (IRSDC), through simplified procedures and a 99-year lease tenor. At present, work of remodelling the Gandhinagar and Habibganj stations is in progress and is expected to be completed in the next few months. Further, contracts have been awarded for the Gomti Nagar and Charbagh stations. Besides this, bids for the redevelopment of the Anand Vihar, Bijwasan, Chandigarh, Jammu Tawi, Kozhikode, Surat and Puducherry stations have been invited and are currently under evaluation.
  • The foundation stone for the redevelopment of the Nagpur railway station was laid in March 2019. The project involves redevelopment of the station on a public-private partnership basis, at an estimated cost of Rs 1.5 billion. The work will be taken up by IRSDC.
  • As per reports released in March 2019, in a bid to speed up the first phase of the redevelopment of 42 railways stations under the Rs 1 trillion programme, the government has now adopted a cluster approach by making five public sector companies in charge of each cluster. The companies are RITES, Mecon, National Project Construction Corporation, Engineering Projects (India), and Bridge and Roof Company (India).

Freight segment initiatives

  • In December 2018, Dedicated Freight Corridor Corporation of India Limited completed the 306 km section between Madar (Ajmer) in Rajasthan and Kishangarh (Rewari) in Haryana in the western segment of the dedicated freight corridor.
  • IR has also introduced a double-stack dwarf container service in order to capture lost traffic through a new delivery model for domestic cargo. It has been able to generate increased revenue of Rs 1.8 million through the operation of these container services. The short height double containers can run on most railway tracks. With the use of these containers, costs will be significantly reduced.
  • IR commenced a roll on, roll off service on a commercial basis on Central Railway and Western Railway in September 2018, as part of the new delivery system that aims to provide multimodal transport options.

Improved and state-of-the-art trains introduced

  • In a major move, the central government flagged off the semi-high speed, self-propelled Train 18 (Vande Bharat Express) in February 2019. According to plans, IR will gradually replace the Shatabdi Express trains with Train 18. The government also flagged off the first ever 10,000 HP diesel-to-electric converted freighter locomotive from the Diesel Locomotive Works (DLW), Varanasi, in February 2019.
  • In the same month, the government launched the new Humsafar Express connecting Madhupur in Jharkhand to Anand Vihar in New Delhi. The new train will operate under the Eastern Railway zone.
  • IR also rolled out the first rake of the Ganga-Damodar Express under Project Utkrisht, which aims to give a facelift to at least 140 rakes of superfast and mail trains. The train is fitted with high-end amenities such as LED lighting and biotoilets, among other facilities.
  • IR has ordered another 40 sets of indigenously developed and manufactured Train 18 for new routes. Further, for improved safety, it plans to fit the driver cabin crash guard with aluminium instead of the fibre-reinforced plastic that is currently being used.
  • In March 2019, Steel Authority of India Limited’s Durgapur steel plant dispatched its first consignment of 30 wheels for Linke Hofmann Busch (LHB) coaches. The consignment is part of a larger order for around 1,000 wheels that is being executed by the steel plant. These LHB wheels have been developed with the help of the Research Design and Standards Organisation and have a unique web profile with metallurgical properties as well as a pneumatic disc brake system for efficient braking.
  • In April 2019, the Chittaranjan Locomotive Works  rolled out the first indigenous 9,000 HP electric locomotive under the Make in India initiative. The new locomotive has been developed by upgrading a 6,000 HP electric locomotive at an incremental cost of Rs 10.6 million. Siemens is equipping IR’s 9,000 HP electric locomotive with the first indigenously designed and produced integrated propulsion system and steel tank transformer.
  • Another IR initiative is the conversion of two 4,000 HP diesel locomotives to 12,000 HP electric locomotives. These were rolled out by the DLW in January 2019 and are currently undergoing trial runs. The freight engine has been designed to run at a speed of 105 kmph.
  • While IR is quite upbeat about its ongoing digital and infrastructural transformation, industry experts continue to wait for this vast monolith to open its door for large-scale modernisation. Taking productive cues from the world over, India’s railway system is certainly in urgent need of an overhaul. Privatisation of the existing assets to improve operational efficiency is according to some experts the need of the hour. Nonetheless, for the time being, the initiatives enumerated above are undoubtedly noteworthy and will continue to gradually take IR up the efficiency ladder.