April 2020

As of now, as is the case in so many other sectors, IR is intent on surviving the pandemic and lockdown without suffering more than the inevitable losses. However, once the lockdown ends, IR will play a critical role in ensuring economic revival as a key transporter of people and goods.

There will be many modifications to the post-COVID plans. IR is surely going to have to recalibrate its plans and timelines to induct the private sector. The economy has taken a big blow and private sector interest and ability to invest are both impeded.

Given the changes in behaviour and design norms imposed by the new paradigms of physical distancing, higher attention to sanitation, etc., IR may also need to review many of its ambitious plans about station redevelopment, enhanced local and regional connectivity, etc. It is likely to undergo revisions in budgetary allocations and support, which means that it may need to postpone the implementation of many projects.

Until the pandemic hit, IR was focused on improving its infrastructure and implementing far-reaching improvements in various areas – safety standards, digitalisation, indigenisation of design and manufacturing, etc. The DFC is now in the last laps of construction, and if it does proceed on schedule, it will be fully commissioned by December 2021. Overruns are likely, however. In other respects, IR continues to add track km, double tracks, build more bridges and eliminate level crossings.

IR’s energy mix is shifting to electricity (and it is developing large capacities in renewables) and this should, in time, bring down its energy bill considerably. Ambitious station redevelopment plans are not only about aesthetics and improving capacity; considerable revenues could be garnered from redevelopment and rentals. Digitalisation could not only result in a painless interface for customers, it could also improve operational efficiencies.

Post the lockdown, IR’s freight carrying capacities will be vital as it will buttress economic recovery. It is more difficult to judge what will happen in the passenger segment. As it stands, physical distancing is impossible to implement when it comes to carriage of passengers. Policymakers may have to think deeply about this issue since the railways performs a vital service when it comes to enabling mass movement of people.

We will get a better sense of revised timelines and changes in policy priorities once the finance minister reviews the situation and releases a budget update. The first quarter of the current fiscal year (and the last quarter of 2019-20) has been a washout in terms of revenue generation.

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