10 Key Policy and Infra Issues for the New Railway Minister

The swearing in of Prime Minister Narendra Modi and his ministers is still some hours away. Speculation continues over who will take over the crucial Ministry of Railways, but the name is likely to be announced only after the swearing-in of all ministers is complete.

In the past few years, the Indian Railways has visibly transformed into a more agile and passenger-oriented organisation under former ministers Suresh Prabhu and Piyush Goyal. However, there are still many issues that require urgent and decisive attention.

Here’s are the 10 things that are likely to be on the new minister’s plate when she or he takes over:

Infrastructure

  • Project Delays: Long and avoidable delays in project execution continue to be a stumbling block in IR’s plans for the future. Delays cause significant cost escalations and loss of potential revenue. As seen on several occasions earlier, a large proportion of works underway at present are seeing significant time and cost over-runs. Some zones are chronic poor executors of projects. The underlying problems have to be fixed if IR is to achieve its goals in future.
  • Severe Congestion: Decades of muddled priorities made IR neglect the routes that earned IR’s profits. Money was frittered away on unproductive lines and non-core activities. IR today has trouble handling profitable freight or passenger volumes since capacity expansion hasn’t kept pace with an increase in traffic. The new minister will have to focus on enhancement of capacity on all congested freight-dense routes first, followed by passenger traffic routes.
  • Technology Upgrades: Despite efforts over the past few years, there is little headway in implementation of ETCS Level 2, mobile telephony-based communication systems, CBTC (for very dense sections) and other technology to improve network throughput and safety. It will take more than a decade for the benefits to become visible if delays continue. The ministry needs to take a clear stand and push hard if any progress is to be made.

Policy and Regulation

  • RDA and RTA: The formation of the long-awaited Railway Development Authority has been going on at a snail’s pace. Progress on an independent authority to fix fares and depoliticise the process has been slow. These are crucial reforms to ensure policy uniformity and continuity well after politicians are out of the picture.
  • Offloading Subsidies: Offloading passenger traffic subsidy burden to various Union, State Government departments as per their demands for new lines, trains, and reduced fares for transport of people or goods is essential. This will greatly improve IR’s books, and make it a financially strong organisation that directs revenue inflows towards productive expenditure.
  • Offloading Suburban Networks: A similar approach also needs to be applied to loss-making suburban networks. These networks are essential to their respective city’s economy but often languish for lack of investment. Such networks contribute greatly to local transport in cities like Mumbai, Kolkata, Delhi and Hyderabad. State and Central governments must be asked to contribute to capacity enhancements and fare subsidy for these networks.
  • Rolling Stock Policy: Formulation of a cohesive policy on acquisition, indigenous design and manufacturing of trainsets, locomotives and rolling stock for IR’s network as well as metro networks. The current approach is ad-hoc, confused and is costing IR significantly because of unproductive purchases.
  • Separation of PUs, Workshops: IR’s Production Units are known for lethargic progress and poor-quality output at high staff levels. The minister will have to consider hard decisions on hiving off Production Units, workshops and maintenance units into separate entities, modernise their equipment and workforce, and help them become global vendors who do not have to depend on the government to push sales of railway equipment to under-developed countries.
  • Other Revenues: The policy for non-fare-box revenues is so far best defined as non-existent. A clear path forward on utilisation of stations and rolling stock for advertising or commercial purposes in a uniform manner, with nationwide inventory available for auction in an online marketplace, is still not visible. ‘World Class’ stations, redevelopment of stations and railway land continue in a seemingly ad-hoc manner, bereft of any clear policy direction.
  • New Competitive Environment: Re-examination of the freight transport policy in view of a rapidly changing landscape where improving highways and upcoming waterways threaten to rob IR of more highly profitable freight traffic in the coming years. A business-friendly approach will become essential if IR wants to increase its market share as revenues from coal transport begin their steady decline over the next few decades.

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About the Author: Alok Patel

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