New railways minister Ashwini Vaishnaw will haul a stressed but exciting network

Ashwini Vaishnaw has taken charge of the railways ministry that is struggling with a sharp fall in passenger traffic because of the pandemic but has an exciting journey ahead with bullet trains, private-sector rail services, and high-speed freight movement on the horizon.

Vaishnaw, a former bureaucrat, will supervise the implementation of the National Rail Plan that aims to privatize some trains and stations, develop dedicated freight corridors, electrify and modernise the network and set up the national high-speed rail project

Revenue Growth

The revenue of Indian Railways dipped by Rs 36,993 crore in 2020, mainly because the pandemic reduced the revenue from passenger traffic by Rs 32,768.97.

The government is confident that revenue from passengers will rise after the pandemic ebbs, but growth was marginal even in 2019-20, before the outbreak of COVID-19.

The network has to compete with airlines and road transporters for passengers and with trucks for cargo. Its share of cargo has already declined with the improvement in road infrastructure and connectivity.

Quality of services

Indian Railways is far behind global peers in quality of services it offers although it has improved after severe criticism from various quarters including the CAG, which said in 2017 that food served by the national carrier was unfit for human consumption. It said food served at railway stations and trains was unhygienic and substandard.

Internationally, customer experience in railways is comparable with airlines. Indian Railways needs to focus on its objective of efficiently moving people and cargo.

The National Rail Plan 2030 has been formulated to develop infrastructure over the next decade so that the network can meet traffic requirements up to 2050, but the ministry will have to ensure timely execution of projects along with delivery of high-quality services to customers.

Investment in modernising tracks, increasing the speed of trains, and rehabilitation is another challenge.

In the past, Railway projects have suffered from huge time and cost overrun on account of the thin spread of resources over a large number of projects and the execution of projects prior to the completion of prerequisite activities like land acquisition and other clearances.

The Comptroller and Auditor General also criticized the railways for delays in track electrification, which led to cost overruns of Rs 3,000 crore.

Railways took nearly nine years to invite tenders for two dozen approved projects to electrify tracks, the auditor had said, highlighting the tardy progress.

Electrification of Railways

Indian Railways aims to complete the electrification of its entire broad-gauge network by 2023 but the pandemic has slowed down the project, which is expected to reduce the fuel bill and make operations more efficient.

Any delay in the execution of these projects is likely to have a cascading effect on the operations of the whole operations of the Indian Railways.

Privatisation

The Indian Railways plans to undertake a partnership approach for passenger train operations to enhance overall service quality and operational efficiency.

In the first phase, it plans to introduce 151 modern passenger trains operated through public-private partnerships over 109 pairs of routes.

While interest for these partnerships from private investors is expected to be quite high, the Indian Railways lack of experience in this model coupled with a lack of experienced private players in the industry is seen as a major cause for concern for the success of this model.