Accelerating Development: Recent measures taken to transform the sector

Recent measures taken to transform the sector

Indian Railways (IR) has embarked upon a journey of transformation with a number of initiatives under way for developing infrastructure, improving the passenger experience and increasing the overall competitiveness of the freight segment vis-a-vis other transportation modes. Steps are also being taken for enhancing safety, digitalising operations, improving cleanliness and reducing the carbon footprint. Besides, a number of initiatives including manufacturing of locomotives, train sets and coaches, are being planned as part of the Make in India programme. Another landmark step has been the approval of the organisational restructuring of the railways. With this, a single cadre, the Indian Railway Management Service, will replace the eight current Group A services. The unification of services is expected to end departmentalism, promote smooth working of the railways and expedite decision making. Moreover, recognising the need for financial and managerial capital, IR is increasingly focusing on leveraging public-private partnerships (PPPs) for speeding up sector development.

Indian Infrastructure provides a snapshot of key developments in recent years…

Freight segment initiatives

IR has taken several initiatives in the freight segment that are aimed at rationalisation of tariffs, improvement in the ease of doing business and development of infrastructure to enhance capability and attract freight to the railways. The commissioning of the long-awaited Eastern and Western Dedicated Freight Corridors (DFCs) by December 2021 is expected to be a game changer for the sector. Currently, the Bhadan–Khurja section of the Eastern DFC and the Rewari-Madar section of the Western DFC have been completed.

Further, in 2019-20, the 15 per cent busy season surcharge (that is levied from October 1 to June 30) was removed for all commodities except iron ore and petroleum oil and lubricants. The railways has also waived the 5 per cent supplementary charge applicable on mini and two point rakes to boost loading of smaller cargo sizes and help industries such as cement, steel and foodgrains. Besides, a round trip charge for container traffic has been introduced for a distance of less than 50 km. Under this scheme, the haulage charge for the 0-100 km slab will be charged for the round trip, instead of charging for the 0-50 km slab each way. Recently, around 90 commodities have been denotified and brought under “freight all kind” rates that are lower than the “container class” rates at which notified commodities are charged.

Moreover, the electronic transmission of railway receipts – eT-RR – facility was implemented pan-India in 2019. It is expected to bring down the transaction costs for rail customers and pave the way for greater digitalisation.

Passenger segment initiatives

Various measures have also been taken to improve the passenger experience and provide world-class amenities to travelers. Several new trains including the Vande Bharat Express and the Tejas Express that are equipped with modern facilities such as onboard infotainment and GPS-based passenger information systems have been introduced in the past couple of years. Besides, measures such as attaching additional coaches and running Suvidha trains have also been taken to increase capacity.

Another key initiative is the large-scale redevelopment of 600 stations to offer world-class infrastructure. At present, work of remodelling the Gandhinagar and Habibganj stations is under way. Various other projects are currently at the tendering or planning stage. Moreover, IR is also taking measures for improving the speed of passenger trains. In August 2019, the government approved the proposal to increase train speeds on the Delhi-Mumbai and Delhi-Howrah routes to 160 kmph. Further, the development of high speed rail (HSR) projects has also been a major step to provide faster connectivity. While currently the Mumbai-Ahmedabad corridor is the only sanctioned HSR project in the country, several other corridors including the diamond quadrilateral and the Delhi-Ahmedabad route, are being planned.

Besides, IR has rationalised the flexi-fare scheme and discontinued it for trains with less than 50 per cent average monthly occupancy. Various measures have also been introduced to ease the ticket reservation process including the introduction of the Alternate Train Accommodation Scheme, establishment of Yatri Ticket SuvidhaKendras and expansion of digital payment modes such as net banking, credit/debit cards and e-wallets.

Digital transformation

In the past few years, IR has increased its focus on digitalisation of operations to improve efficiency and enhance passenger convenience. It has launched the Real-Time Train Information System (RTIS) in collaboration with the Indian Space Research Organisation. RTIS is designed to provide real-time positional information of locomotives to the railways. Further, the Unreserved Ticketing System which allows customers to purchase unreserved tickets, including season tickets and platform tickets, online has been introduced. Another initiative has been the launch of Rail Madad app which allows passengers to register complaints and get solutions to problems on a real-time basis. Besides, around 5,500 railway stations in the country have been provided with free Wi-Fi facilities as of December 2019.

IR has also adopted the e-Office system to make work processes paperless, efficient and transparent. This has enabled quick, systematic and timely disposal of pending files. Moreover, end-to-end digitalisation of IR’s procurement process from publication of tenders to technical evaluation of bids, tender finalisation, preparation and issue of letter of acceptance and processing of vendors’ bills has been accomplished. A pilot project to usher Industry 4.0 at the Modern Coach Factory in Rae Bareli has also been launched.

Safety enhancement

IR registered its best safety record during 2019-20 with zero passenger fatalities in consequential railway accidents from April 2019 to February 2020. Several initiatives including massive renewal of tracks, improvements in signalling systems, and switching over to modern and safer Linke Hofmann Busch coaches have helped in reduction of rail accidents. The introduction of the Rashtriya Rail SanrakshaKosh (RRSK) has played a crucial role in improvement of safety. The RRSK was created in 2017-18 with a corpus of Rs 1 trillion to be disbursed over a period of five years, at an annual outlay of Rs 200 billion.

Several modern technologies have also been adopted for safety enhancement including the use of online monitoring of rolling stock (OMRS) systems, Fog Pass devices, and automatic train protection (ATP) systems. The deployment of OMRS systems has helped the railways in automation of inspections. The first phase of installing 25 OMRS systems at 20 locations is currently in progress. Further, 12,205 GPS-based Fog Pass devices have been provided to loco pilots to assist them in running trains during foggy weather conditions. Besides, IR plans to provide ATP systems conforming to European Train Control System Level-2 standards on its entire broad gauge network.

Revenue augmentation and funding initiatives

With the increase in expenses related to salaries and pensions, fuel costs, etc., the share of IR’s internal resources in funding capital expenditure has declined. Moreover, as budgetary support from the central government has remained constant, IR has started exploring new sources of generating revenue to fund its projects. The use of PPPs has been proposed to ensure faster development in several areas including completion of tracks, rolling stock manufacturing, and delivery of passenger and freight services. IR has identified 100 routes to induct 150 private trains at an envisaged investment of Rs 225 billion. Moreover, as per the National Infrastructure Pipeline, it has plans to privatise 500 trains by 2025. The redevelopment of 50 stations on a PPP basis has also been taken up on a priority basis.

Besides, IR has successfully completed intial public offerings (IPO) of four railway entities – IRCON International Limited, RITES Limited, Rail Vikas Nigam Limited and IRCTC Limited – to generate additional revenue. In January 2020, IRFC Limited also filed a draft prospectus with the Securities and Exchange Board of India for its IPO. Further, IR has taken initiatives for the enhancement of non-fare revenue through sources such as advertising, provision of content-on-demand services and commercial utilisation of surplus land.

Make in India initiatives

IR has become a key driver of the government’s Make in India programme, enabling the country to become a manufacturing base for railway equipment. At present, the railways is able to meet more than 97 per cent of its requirements from indigenous sources. The launch of the Vande Bharat Express that was manufactured with 80 per cent indigenous components was a big success story for IR. Further, the Chittaranjan Locomotive Works has developed a semi-high speed WAP-7HS locomotive that can pull a 24-coach passenger train at a speed of 160 kmph.

Besides, track maintenance machines such as utility vehicles and rail-bound maintenance vehicles have been fully indigenised. Plasser India, an independent entity of Austria-based Plasser and Theurer, commissioned a track machinery plant at Karjan in Gujarat in November 2019.

Conclusion

IR is taking a number of other measures to transform its operations. By 2023, it will be 100 per cent electrically run and has plans to source about 1,000 MW of solar power and about 200 MW of wind power, progressively, by 2021-22.

Further, around 38,331 bio-toilets were installed in 11,703 coaches during the period April-November 2019. IR has also introduced comprehensive policy guidelines for the installation of plastic bottle crushing machines by zonal railways.

The ongoing digital and infrastructural transformation initiatives being implemented by IR are undoubtedly noteworthy and will play a key role in improving the operational efficiency of the national transporter.