MEETING THE REQUIREMENTS OF THE SOCIETY – RAIL INFRASTRUCTURE

[Mr. M. GOVINDARAJAN]

Needs of Infrastructure

Infrastructure represents those types of capital goods that serve the activities of many industries included paved roads, railroads, seaports, communication networks, financial systems, and energy supplies that all support production and marketing for industries within the country. Beside that, the quality of an Infrastructure directly affects a country's economic growth potential and the ability of an enterprise to engage effectively. Infrastructure provides services that support economic growth by increasing the productivity of labors and capital thereby reducing the costs of production and raising profitability, production, income and employment.

Infrastructure investment

Infrastructure investment and consumption of infrastructure services have significant implications for achievement of sustainable development objectives, as infrastructure services:

• Encourage new investment across the economy;
• Underpin many aspects of economic and social activity;
• Facilitate the flow of ideas, goods and services;
• Facilitate regional economic growth;
• Are critical to maintain an inclusive, healthy and productive workforce;
• Involve large scale investment with significant environmental impacts; and
• Generate a range of externalities in their production and consumption.

Infrastructure investment can increase productivity by-

• Promoting efficient resource allocation through easier access for labors and materials to particular localities and allowing alternative activities, employment opportunities and investment to emerge; and
• Providing the necessary economies of scale for urban agglomeration.

Due to the relationship between economic infrastructure and economic growth appears to run in both directions and the need for investment in economic infrastructure never goes away. The maintenance and expansion of infrastructure are important dimensions of supporting economic activity in a growing economy.

Infrastructure investment needs

Globally, future investment needs over the period to 2030 will depend in part on the infrastructure currently in place, the growth in demand expected over that period, and the additional capacity required in he different locations.

The Infrastructure to 2030 report (OECD, 2006-07) concluded that global infrastructure investment needs across the land transport (road, rail), telecoms, electricity and water sectors would amount to around USD 53 trillion over 2010-30. Annual investment requirements for these sectors amount to some 2.5% of world GDP, which would rise to 3.5% of GDP if electricity generation and other energy-related infrastructure investments in oil, gas and coal are included.

Impact of infrastructure

Dr. Jeffrey Delmon, Senior Infrastructure Specialist of The World Bank, begins his book indicating that, “Poor infrastructure impedes a nation’s economic growth and international competitiveness (The World Bank 2006). Insufficient infrastructure also represents a major cause of loss of quality of life, illness and death (Willoughby 2004). This raises infrastructure services from good investment to a moral and economic imperative. In order to stimulate growth and reduce poverty, it is essential to improve the supply, quality and affordability of infrastructure services. The unmet demands are huge, and investments have not matched demand (The World Bank 2008).”

The Global Competitiveness Report 2010-2011 of the 2010 World Economic Forum values “Effective modes of transport, including quality roads, railroads, ports, and air transport, enable entrepreneurs to get their goods and services to market in a secure and timely manner and facilitate the movement of workers to the most suitable jobs. Economies also depend on electricity supplies that are free of interruptions and shortages so that businesses and factories can work unimpeded. Finally, a solid and extensive communications network allows for a rapid and free flow of information, which increases overall economic efficiency by helping to ensure that businesses can communicate and decisions are made by economic actors taking into account all available relevant information.

Infrastructure is vital for emerging economies to realize their aspirations.   It is vital for the mother who hopes that the water coming out of the pipe is clean and available, so here children do not get sick for the informal settlement dweller who wants his children to study but cannot afford an electricity bill; for formers who need all weather roads and reliable shipping to get their goods to market.   There is no doubt that providing support for infrastructure in an environment is challenging and evidence shows that investors in infrastructure are very sensitive to country risk.  In this sense, it is the job of institution such as the World Bank Group to assistant governments to manage such risks, whether through enabling effective regulation and policy, through increased transparency, or risk sharing through instruments such as guarantees.

Transport Infrastructure

Mobility is one of the most fundamental and important characteristics of economic activity as it satisfies the basic need of going from one location to the other, a need shared by passengers, freight and information. All economies and regions do not share the same level of mobility as most are in a different stage in their mobility transition towards motorized forms of transport. Economies that possess greater mobility are often those with better opportunities to develop than those with scarce mobility. Reduced mobility impedes development while greater mobility is a catalyst for development. Mobility is thus a reliable indicator of development. Providing this mobility is an industry that offers services to its customers, employs people and pays wages, invests capital and generates income.  The following categories of impacts can be assessed:

• Core. The most fundamental impacts of transportation relate to the physical capacity to convey passengers and goods and the associated lower costs. This involves the setting of routes enabling new or existing interactions between economic entities.
• Operational. Improvement in the time performance, notably in terms of reliability, as well as reduced loss or damage. This implies a better utilization level of existing transportation assets benefiting its users as passengers and freight are conveyed more rapidly and with less delay.
• Geographical. Access to a wider market base where economies of scale in production, distribution and consumption can be improved. Increases in productivity from the access to a larger and more diverse base of inputs (raw materials, parts, energy or labor) and broader markets for diverse outputs (intermediate and finished goods). Another important geographical impact concerns the influence of transport on the location of activities.

The various types of transport impacts

• Seaports. Linked with the early stages of European expansion from the 16th to the 18th centuries. They supported the development of international trade through colonial empires, but were constrained by limited inland access.
• Rivers and canals. The first stage of the industrial revolution in the late 18th and early 19th centuries was linked to the development of canal systems in Western Europe and North America, mainly to transport heavy goods. This permitted the development of rudimentary and constrained inland distribution systems.
• Railways. The second stage of industrial revolution in the 19th century was intimately linked to the development and implementation of rail systems, some transcontinental, enabling a more flexible inland transportation system.
• Roads. The 20th century saw the development of road transportation systems and automobile manufacturing. Individual transportation became a commodity available to the masses, especially after the Second World War. This process was reinforced by the development of national highway systems.
• Airways and information. The later part of the 20th century saw the development of global air and telecommunication networks in conjunction with the globalization of economic activities. New organization, control and maintenance capacities were made possible. Electronic communications have become consistent with transport functions, especially in the rapidly developing realm of logistics and supply chain management.

India infrastructure is quite developed and the transportation network of the country contributes towards the economic development of the country. The transportation network of India consists of roadways transport, railways, shoreline shipping, and airways transport etc. The transportation system of the nation is well-set and efficiently managed and is a key player in maintaining the financial development of the country. 

Steps taken to improve infrastructure

• Establishment of Indian Infrastructure Finance Corporation;
• Set up to fund infrastructure funds in India & is owned by Government of India;
• Will lend money at low rates to public and private infrastructure projects;
• Would be able to borrow at low rates at low rates as they are guaranteed by GOI;
• Government has started the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to improve urban infrastructure.

Rail infrastructure

Indian Railways, world’s second largest rail network under a single management, has been contributing to the development of the country’s industrial and economic landscape for over 150 years. Of the two main segments of the Indian Railways, freight and passenger, the freight segment accounts for roughly two-thirds of revenues. Within the freight segment, bulk traffic accounts for nearly 95 percent, of which more than 44 percent is coal. Improved resource management, inter alia, through increased wagon load, faster turnaround time and a more rational pricing policy has led to an improvement in the performance of the railways during the last two years.

Vision of Railways

Indian Railways shall provide safe, efficient, affordable, customer-focused and environmentally sustainable integrated transportation solutions. It shall be a modern vehicle of inclusive growth, connecting regions, communities, ports and centres of industry, commerce, tourism and pilgrimage across the country.

Objectives                      

1. To achieve improvement in financial performance;

2. Increase the traffic carried in respect of passengers as well as goods;

3. To improve the quality of service;

4. Infrastructure Augmentation;

5. Enhance safety and security;

6. Green initiatives and efficient energy management.

Advantages

The advantages caused to the public are highly appreciated.   The advantages are –

• Convenient;
• Faster;
• Carrying heavy goods in large quantities;
• Less affected by natural calamities.

Disadvantages

• Expensive;
• Remote parts;
• Fixed;
• Accidents;
• Stiff competition from private airlines.

Features of Indian Railway

• About 64000 km of rail network;
• Connects 7083 stations;
• Carry 2.20 crore passengers & 2.50 million tones of goods every day;
• About 1.5 millions of workforce

Rapid Transit

The rapid transit system in India comprises the metro rail and monorail services. The Kolkata Metro is the oldest metro railway service in India which started way back in 1984. Other metro services in the country are Delhi Metro, Chennai Mass Rapid Transit System, and Namma Metro (Bengaluru).   Metro railway services that are under construction include Rapid Metro Rail Gurgaon, Mumbai Metro, Chennai Metro, Jaipur Metro, Hyderabad Metro, Navi Mumbai Metro, and Kochi Metro.

Long distance Transport

Railway services and flights constitute the long distance transportation network in the country. The trains are categorized according to their average speed. The various categories are Duronto Express, Shatabdi Express and Jan Shatabdi Express, Rajdhani Express, Superfast Express, Garib Rath, Express and Mail trains, Superfast Express, Passenger and Fast Passenger, and Suburban trains.

The various suburban railway systems in the country are Chennai Suburban Railway, Delhi Suburban Railway, Barabanki-Lucknow Suburban Railway, Kolkata Suburban Railway, Mumbai Suburban Railway, Multi-Modal Transport System (MMTS), Lucknow-Kanpur Suburban Railway, and Pune Suburban Railway. The Indian Railways is the statutory authority of all railway operations in the country. 

Sub-urban Railway Services

Currently, the sub-urban railway services are available in Kolkata, Mumbai, Delhi, Chennai and MMTS, Hyderabad.

Projected Investment in 11^th Plan

Year wise projected investment during the 11^th plan in Railways including MRTS

Year	Investment (in ‘crores)
2007-08	34225
2008-09	40964
2009-10	49525
2010-11	60393
2011-12	76701

The total investment is ₹ 261808 crores amounting to 65.45US $billion (@Rs.40/$) constituting 12.73% of the total infrastructure.

Twelfth Plan

The Twelfth Five Year Plan (2012-2017) has envisaged an integrated approach for the transport sector as a whole. The vision for transport is to be guided by a modal mix that will lead to an efficient, sustainable, economical, safe, reliable, environment friendly, and regionally balanced transport system. In line with the objectives of the Plan, Indian Railways aims at developing a strategy to build up the rail network to be part of an effective multi-modal transport system.

Freight performance

Freight loading by Indian Railways during the fiscal 2011-12 increased to 969.1 MMT against 921.7 MMT in 2010-11, registering an increase of 5.1 per cent. The freight traffic target for the year 2012-13 was fixed at 1,025 MMT (Budget Estimates [BE]). During April-November 2012, Indian Railways carried 647.1 MMT of revenue-earning freight traffic (an increase of 4.7 per cent) compared to 618.05 MMT carried during the corresponding period of the previous year. The moderate growth in freight traffic may be attributed not only to the overall slowdown in the economy but also to other factors like a ban on iron ore exports from Karnataka and reduced imports of fertilizers.

Rationalization of Railway freight and passenger fare

While Indian Railways' input costs increased by 10.6 per cent per annum between 2004-5 and 2010-11, passenger fares remained unchanged or were even reduced in lower classes thereby constraining internal resource generation, essential for replacement /renewal of assets, operation and maintenance activities, and critical safety and passenger amenity works. Further, cross-subsidy through the freight business was no longer viable due to fast evolving competition from other modes of transport. Keeping these factors in mind, an increase in passenger fares was announced on 9 January 2013, effective from the midnight of 21-22 January 2013. While second class ordinary (suburban) fares were raised by 2 paise per km, second class ordinary (non-suburban) fares were increased by 3 paise per km and second class (mail/express) fares by 4 paise per km. For the sleeper class the increase was 6 paise per km; For AC chair car, AC 3-tier, and AC first class, fares were hiked by 10 paise per km, while for first class and AC 2-tier, the increase was 3 paise and 6 paise per km respectively. A rationalized freight tariff structure was also brought into effect from 6 March 2012.

Up gradation of passenger amenities

The Adarsh stations scheme was introduced in 2009. Adarsh stations are provided with basic facilities such as drinking water, functioning toilets, catering services, waiting rooms and dormitories especially for lady passengers, and better signage. A total of 976 stations have been identified for development as Adarsh stations, of which 616 have so far been developed. The Computerized Unreserved Ticketing System (UTS) was made available at 5,560 locations with 10,172 counters by end-November 2012. About 250 additional automatic ticket-vending machines (ATVMs) were commissioned during 2012-13 taking the total tally of installed ATVMs to 808. The Freight Operation Information System (FOIS) gives an account of all demands, number of loads/rakes/trains and their pipelines, freight locos, and stock at aggregate level. The Rake Management System (RMS) module of FOIS has been implemented at 246 locations and it covers all major yards/lobbies and control offices at various divisions and zones of Indian Railways.

Dedicated Freight Corridor Project

The dedicated Rail Freight Corridor is being developed at a total cost of USD 15 billion.  The Eastern and Western Dedicated Freight Corridors (DFC) are a mega rail transport project being undertaken to increase transportation capacity, reduce unit costs of transportation, and improve service quality. The Eastern DFC (1839 route kilometers [RKM]) extends from Dankuni near Kolkata to Ludhiana in Punjab, while the Western DFC (1499 RKM) extends from the Jawahar Lal Nehru Port (JNPT) in Mumbai to Dadri /Rewari near Delhi. A special purpose vehicle, the Dedicated Freight Corridor Corporation of India Limited has been set up to implement the project. Out of 10,703 ha of land to be acquired for the project, 7,768 ha (73 per cent) has already been awarded under the Railway Amendment Act (RAA) 2008. The Eastern and Western DFC projects are being funded through a mix of bilateral/multilateral loans, gross budgetary support (GBS), and PPP. The Western DFC is being funded by the Japan International Cooperation Agency (JICA) up to 77 per cent of the total cost. Funding has been tied up and award of civil contract of 900 km is in process. The remaining portion of the project construction cost will be borne by the Ministry of Railways as equity funding. The Ludhiana to Mughalsarai section (1183 km) of the Eastern DFC is being funded by the World Bank up to 66 per cent of the project cost. Funding for the first sector, viz. Khurja-Kanpur (343 km), has been tied up and award of civil contract is under way. Funding tie up with the World Bank for the remaining sectors is also in process. The Mughalsarai-Sonnagar sector (122 km) will be funded by Indian Railways' own resources. Civil construction work of this sector is in progress. The Dankuni-Sonnagar section (534 km) of the Eastern DFC will be implemented through PPP mode.

Apart from the Eastern and Western DFCs, a feasibility study has also been undertaken on four future freight corridors, viz. East-West Corridor (Kolkata-Mumbai), North-South Corridor (Delhi-Chennai), East Coast Corridor (Kharagpur-Vijayawada) and Southern Corridor (Goa-Chennai). A pre-feasibility study of the Chennai-Bangalore Freight Corridor is also being proposed. After commissioning of the Eastern and Western DFCs, it is planned to upgrade the speed of passenger trains to 160-200 kmph on the existing routes. A feasibility study for up gradation of speed of passenger trains to 160-200 kmph on the existing Delhi-Mumbai route has been undertaken with co-operation from the Government of Japan in 2012-13.

Initiatives by Indian Railways

The following are the new initiatives taken by Indian Railways:

• Kisan Vision Project -  To encourage setting up of cold storage and temperature-controlled perishable cargo centers through PPP mode, logistics based PSUs including the Container Corporation of India Limited, Central Warehousing Corporation, and Central Rail-side Warehouse Company Limited have been asked to provide infrastructure at six Indian Railways locations under a pilot project--the Kisan Vision Project. Of the six locations, so far Singur (West Bengal) and Nasik (Ojhar in Maharashtra) are in operation, while New Jalpaiguri (West Bengal), Dankuni (West Bengal), and New Azadpur (Adarsh Nagar, Delhi) are under process and will shortly be completed. Macheda (West Bengal) being not a remunerative project, was not found to be a potential location for setting up a perishable cargo shed.
• High Speed Passenger Trains - Indian Railways is adopting a multi-pronged strategy to provide safer, faster, cleaner, and more comfortable passenger trains. Seven corridors have been identified for conducting pre-feasibility studies for running high-speed trains (popularly referred to as bullet trains) at speeds above 350 kmph. These corridors will be set up through PPP route. Initially, the Mumbai-Ahmedabad corridor has been taken up for which the pre-feasibility study has been completed. Work is in progress in respect of the remaining corridors. A study is also being done on the Delhi-Mumbai route for raising the speed of passenger trains from 160 kmph to 200 kmph, i.e. for running semi-high speed trains.
• Induction of LHB Coaches -   Linke Holfmann Busch (LHB) coaches are being inducted in train services including existing and certain important Rajdhani and mail/express trains. Till December 2012, LHB coaches had been inducted in about 14 Rajdhani, 12 Shatabdi, and 11 AC Duronto services. LHB coaches have higher carrying capacity, better riding comfort, higher-speed potential, longer life, upgraded amenities, provision of control discharge toilet system, lower maintenance requirement, enhanced safety features, and aesthetic interiors. A rail coach factory at Palakkad has been sanctioned in PPP mode for production of such coaches.
• Introduction of bio-toilets – With a commitment to providing hygienic environment to its passengers and staff, Indian Railways along with the Defence Research and Development Organization (DRDO) has developed environment-friendly bio-toilets for its passenger coaches. Eight trains are running with 436 biotoilets. A complete switch-over to bio-toilets in new coaches has been planned by 2016-17 and Indian Railways has targeted elimination of direct discharge passenger coach toilet systems by the end of the Thirteenth Five Year Plan (2021-22).

Railway Interim budget 2014-15

New lines, passenger friendly measures, premium & express trains, progress on high speed trains, dedicated freight corridor & status quo on passengers are some of the salient points of Interim railway budget 2014.  Following are the highlights of the Interim Rail Budget:

• No increase in passenger fares and freight charges;
• 17 new premium trains, 38 express trains and 10 passenger trains to be launched;
• Premium AC trains with dynamic fares on Delhi-Mumbai route with shorter advance reservation period;
• Passenger rail service to Katra and Vaishnodevi to start shortly;
• Railways to expand services to Megahalay;
• More high speed trains to be launched;
• Railways exploring low cost option of 160 – 200 km/hour trains on select routes;
• Railway Tariff Authority to advise on fares and freight;
• Annual Rail Plan envisaged at ₹ 64305 crores with a budgetary support of ₹ 30,223 crores;
• FDI being enabled for creation of rail infrastructure.

Mission of 2020 of Indian Railways

• High speed rail travel;
• Aims at adding 25000 km route to railway network;
• Raising the speed of regular  passenger trains from 100 – 130 Km ph to 160-200 km/hour
• To develop 50 world class stations which can be recognized internationally;
• Segregating passenger and freight tracks completely;

Conclusion

The development of Indian economy depends on the development of the transport sector.   Greater need required to improve the transport facility at affordable and reasonable price.  Railways play a crucial role in the economic development of our country.  Still most of the people is relying railways for their transportation in lowest classes.  Twenty one million passengers travel daily on Indian Railways using the unreserved journey facility.  Passenger Reservation System provides reservation services to nearly 1.5 to 2.2 million passengers a day on over 2500 trains running throughout the country.  The Indian Railways carries nearly 900 million tonnes of freight in a year. The importance of railway on public is growing day by day. Therefore the new Government is to take care of the Railways and implement projects that will provide transport facility to all including the poor at affordable and reasonable price.

References:

www.studymode.com

www.worldbank.org

http://www.app.gobierno.pr

www.people.hofstra.edu

www.mapsofindia.com

Economic Survey for 2012-13

http://indiabudget.nic.in

www.cris.org.in