Riding Out Tough Times

Railway sector coping well despite the Covid-19 outbreak

The Covid-19 pandemic has had a significant impact on the railway sector. Indian Railways (IR), which operated over 13,500 trains daily carrying around 23 million passengers, halted all its passenger services on March 22, 2020 to control the spread of Covid-19. Since then, passenger services have resumed only in a limited manner due to the rising cases. Freight movement was, however, allowed to continue since the beginning of the lockdown for the transportation of essential commodities across the country.

The sector has responded to the pandemic by turning to the freight segment to combat the losses incurred in the passenger segment and reducing wasteful expenditure through measures such as rationalisation of manpower at workshops, closure of uneconomic rail lines and greater emphasis on digitalisation. Further, it has spearheaded several initiatives such as conversion of passenger coaches into isolation wards and manufacture of personal protective equipment (PPE) coveralls for helping in the management of the outbreak.

Indian Infrastructure reviews the impact of Covid-19 on the freight and passenger segments and the execution of projects in the sector…

Freight segment

IR’s freight revenue remained subdued in the first quarter of 2020-21, with earnings declining close to a third due to disruptions caused by the pandemic-induced lockdown. Freight earnings dropped to Rs 222.67 billion during April-June 2020. This represents a decline of over 30 per cent as compared to the Rs 290 billion earned during the same period in 2019-20. Meanwhile, the freight traffic volume during April-June 2020 reduced by 21.4 per cent to 241.55 million tonnes (mt) as the lockdown severely contracted economic activity across the country.

IR transports a wide basket of goods including foodgrains, fertilisers, cement, coal and iron ore. Of these, cement and coal account for more than 50 per cent of its freight movement. During the first quarter of 2020-21, the earnings from coal declined to Rs 92.6 billion from Rs 163.62 billion in the corresponding period in the previous year, while the revenue from cement fell from Rs 23.96 billion to Rs 15.94 billion. Meanwhile, the earnings from movement of foodgrains witnessed a significant increase from Rs 18.02 billion to Rs 25.59 billion over the same period. The loading of foodgrains during the quarter shot up by 83 per cent on a year-on-year basis to 13.63 mt, with IR ensuring uninterrupted supply of foodgrains during the pandemic. Besides, IR’s freight traffic has picked up in the second quarter and is inching closer to pre-Covid levels with the gradual resumption of economic activity. In July 2020, IR’s freight revenue stood at Rs 89.69 billion, around 10 per cent lower than July 2019 levels. Freight loading during the month was 95.2 mt, only 4.6 per cent lower than last year.

With the grim outlook for the passenger segment for the year, IR is focusing on the freight segment to neutralise its losses and achieve revenue targets. It has set a target of 50 per cent more freight loading as compared to that in 2019-20. Several measures are being taken by the railways to increase freight traffic including simplifying its freight policy, rationalising rates and increasing the speed of goods trains. It has also introduced timetabled parcel trains for countrywide transportation of essential commodities and goods. From March 22, 2020 to July 27, 2020, these trains made 4,541 trips and transported 241,000 tonnes of cargo, generating revenues of Rs 868.8 million. Further, IR is also setting up multidisciplinary business development units across zones to connect with the concerned stakeholders.

Passenger segment

All regular passenger train services have been suspended since March 22, 2020 to curb the spread of Covid-19. However, around 30 Rajdhani trains were put into service in May and 200 special trains started operations on June 1, 2020 with the gradual easing of travel restrictions. Besides, suburban train services are also being operated in Mumbai on a limited basis for employees working in essential sectors. Due to the suspension of passenger services, IR registered a loss of Rs 10.67 billion in the first quarter of 2020-21 as the refunds exceeded the earnings from ticket bookings. It is likely to incur revenue losses of up to Rs 350 billion from the passenger segment in the ongoing fiscal year as the movement of trains is likely to be limited.

In May 2020, the railways also introduced Shramik special trains to ferry migrant labourers stranded in different parts of the country due to the lockdown. IR has operated a total of 4,165 Shramik trains transporting more than 6.3 million people. All the demand for these trains has been met and the last Shramik train was run on July 9, 2020. The railways has spent around Rs 24.12 billion on running these special trains.

Further, to prevent the spread of Covid-19, IR’s production unit – Rail Coach Factory, Kapurthala – has developed coaches with several new features such as foot-operated soap dispensers, copper-coated fixtures, titanium dioxide coating and plasma air purification equipment inside AC ducts to make travel safe for passengers. Besides, an innovative QR code-based contactless ticket checking system is also being implemented on a pan-India basis to reduce human-to-human contact amidst the pandemic.

Impact on railway projects

The Covid-19-induced lockdown that began on March 25, 2020 led to a sudden halt in construction activities for almost all ongoing railway projects. Various flagship projects including the development of dedicated freight corridors and redevelopment of the Habibganj and Gandhinagar railway stations also experienced delays. While construction activities resumed towards end April 2020, several projects still continue to face challenges due to difficulties in labourmobilisation and procurement of specialised equipment. Besides, the bidding timelines of many upcoming projects have also got pushed due to the lockdown.

Further, IR has halted all new infrastructure works sanctioned for 2020-21 till March 2021, other than those related to safety, due to the financial crunch caused by the outbreak. All works sanctioned in previous years that have made little or no progress are likely to be halted as well. However, the order is not going to impact IR’s mega infrastructure projects such as 100 per cent electrification and development of freight and high speed corridors, and work on these is expected to continue as per schedule.

Meanwhile, in a major positive development, IR has completed 200 pending maintenance projects of critical importance including yard remodelling, repair and re-girdering of old bridges and line doubling and electrification works. These projects were languishing for several years and required traffic to be stopped for a long duration. The execution of these projects during the lockdown allowed them to be finished quickly without affecting train services.

Initiatives for crisis management

IR has also taken several initiatives for management of the Covid-19 crisis. It has converted its coaches into isolation wards to augment quarantine facilities. Over 5,200 coaches have been modified so far. Of these, 813 coaches have currently been deployed in states such as Uttar Pradesh, Bihar and Delhi. Further, IR’s production units and workshops have also manufactured PPE coveralls to be used by healthcare personnel dealing with infected patients. Around 191,000 PPE coveralls had been manufactured by the railways till June 24, 2020 to provide protection to front-line medical workers and other staff.

Accelerating digitalisation

The COVID-19 outbreak has provided a boost to digital initiatives of the railways. During the lockdown, IR digitised over 1.2 million documents such as letters, bills, office orders, project drawings and more than 0.4 million files, scrapping their manual handling and reducing not just physical contact between officials but also operational costs. The number of e-receipts increased from 0.45 million during 2019-20 to 1.65 million in April-July 2020. Besides, the number of e-files increased from 0.13 million to 0.54 million during the same period. Further, the use of the e-office platform has grown manyfold since the emergence of the pandemic. As of July 31, 2020, there are 104,332 users of the platform in 106 office units/offices of IR.

Moreover, the railways is also working towards deployment of artificial intelligence-based surveillance cameras at stations that measure body temperatures of individuals and detect whether a person is wearing face mask or not. In fact, IR’s Mumbai Division has procured drones to improve security and surveillance in areas such as station premises, railway track sections, yards and workshops.

The way forward

The railway sector has proven to be a key contributor in India’s response to the Covid-19 crisis. It played a critical role in addressing supply chain challenges during the lockdown when other modes of transport came to a halt. Going forward, IR is expected to increase its focus on the freight segment to make up for the losses incurred due to suspension of passenger trains. The sector will also require adequate policy support and new sources of funding including private investment for faster infrastructure development. w

Nikita Chhabra and Shunyam Nanda

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