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Railroading India鈥檚 railways with pipe dream promises
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Every February, the Indian Parliament performs a curious and unique ritual. The railway minister presents the 鈥渞ailway budget鈥 to the lower house for its approval. A packed chamber hangs on the minister鈥檚 every word. The practice began in the days of the British Raj, when the railway budget rivaled that of the rest of the Indian government.
Of course, railway revenues today, at US$23 billion, no longer dwarf the country鈥檚 budget, which now stands at some US$268 billion. But India鈥檚 railways still produce other mind-boggling figures: 23 million passengers are transported daily (over eight billion per year, more than the world鈥檚 entire population) on 12,617 trains connecting 7,172 stations across a 65,000-kilometer (40,000-mile) network. And, with 1.31 million employees, the railways are the country鈥檚 biggest enterprise.
In short, the railways are the lifeblood of India鈥檚 economy, touching the lives of every segment of society and playing a key role in moving people, freight, and dreams across a congested landscape. Yet much needs fixing.
Huge losses
India鈥檚 trains carry four times the number of passengers as China鈥檚, despite covering only half as many kilometers, but still lose about US$7 billion annually.
The problem is that a succession of railway ministers have refused to raise passenger fares, squeezing freight instead. Though freight transport still accounts for 67 percent of railway revenues, with 2.65 million tons carried every day, the higher fares needed to subsidize passengers have deterred shippers.
As a result, the share of freight carried across India by rail has declined from 89 percent in 1950-1951 to 31 percent today.
Instead, an increasing volume of goods is shipped by road, choking India鈥檚 narrow highways and spewing toxic pollutants into the country鈥檚 increasingly unbreathable air.
By contrast, China鈥檚 railways carry five times as much freight as India鈥檚, even though China has a far better road network.
Moreover, India has laid only 12,000 kilometers of rail track since independence in 1947, adding to the 53,000 left behind by the British. (China added nearly 80,000 kilometers to its rail network over the same period.)
As a result, several lines are operating beyond their capacity, creating long delays. Exacerbating this inefficiency are slow train speeds, which rarely exceed 50 kilometers per hours (and 30 kilometers per hour for freight), partly owing to the need to stop at an ever-rising number of stations.
But perhaps the biggest problem is how dangerous the railways are. Aging rails, tired coaches, old-fashioned signals, and level crossings dating back to the nineteenth century combine with human error to take dozens of lives every year.
Running out of money
With the government losing US$4.5 billion every year by subsidizing passenger fares, it has little money to spend on upgrading infrastructure, improving safety standards, or speeding up the trains. As a result, the railways run out of money before running out of plans.
In the last 30 years, only 317 of 676 projects sanctioned by Parliament have been completed, and it is difficult to imagine how the railways will acquire the estimated US$30 billion needed to complete the remaining 359 projects.
New railway minister Suresh Prabhu鈥檚 pledges include improving and expanding rail lines, introducing wireless Internet at railway stations, eliminating unmanned level crossings, creating a 24-hour toll-free number for users to phone in complaints, and installing security cameras to protect women passengers.
Prabhu鈥檚 most impressive promise 鈥 to raise US$140 billion from market lenders 鈥 is his most problematic, as he has failed to clarify how exactly the railways would repay the loans.
Given how high interest rates would have to be to attract investors, this will be no easy feat, especially because the railways currently have an operating surplus of just 6 percent, or about US$100 million annually 鈥 barely 1 percent of the amount needed to upgrade and modernize the network.
Shashi Tharoor, a former UN under-secretary-general, is a member of India鈥檚 parliament for the Congress party and Chairman of the Parliamentary Standing Committee on External Affairs.Copyright: Project Syndicate, 2015.www.project-syndicate.org. Shanghai Daily condensed the article.
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