Amdavadis should rejoice, for they will be able to whiz into Mumbai at 300 kmph if and when railway minister D.V. Sadananda Gowda’s dream project of a 540-kilometre-long corridor materialises, of course adopting the Planning Commission’s magic formula of PPP (public- private partnership) which, unfortunately, has not been very successful in past projects of both railways and the road sector.
In his budget on Tuesday, Mr Gowda set great store by foreign direct investment and the PPP model but he seems to be on slippery ground, particularly on FDI. This is perhaps why he left it vague, with no details of whether he wants FDI in rolling stock or new lines.
The railways themselves are not too happy about FDI. The experience during Lalu Prasad Yadav’s time in the ministry was not pleasant. It is alleged that an MNC wanted to set up a new plant in Bihar to build locomotives. They were to build 100 locomotives over 10 years. But it fell through as each locomotive was to cost Rs 20 crore against Rs 5 crore, the cost for the same made by Diesel Locomotive Works.
Mr Gowda did, however, announce plans to metamorphose the railways into a paperless organisation in the next five years and to set up a project management group with representatives from the stakeholders to push through urgently needed capacity-enhancing projects. He also announced a state-of-the-art, spanking new station at Baiyappanahalli as the new terminal for north- and east-bound trains at Bengaluru, in his home state of Karnataka. Not only this, Mr Gowda has earmarked Rs 5,100 crore for 23 ongoing strategic projects in the Northeast which could prove to be a major boost for the region’s economy.
Of the 676 projects sanctioned in the last 10 years, only 356 have been completed. To complete the 359 projects still pending, Rs 50,000 crore will be required every year for the next 10 years.
With the operating ratio touching 94 per cent, as revealed by the minister himself, a slew of measures to garner funds have been announced, including PPP for providing rail connectivity to half-a-dozen ports (“Sagar Mala” string of pearls) on the west coast. The PPP model has not been successful in the past. This was evident in the Delhi Metro airport project which failed as there was hardly any traffic and, therefore, no profit. The contractor walked out. It was the same story in the case of the Mumbai Metro where the contractor reportedly walked out saying clearances did not come in time. In the case of the National Highway Authority, the toll plaza in Gurgaon had to be shut down following the private contractor’s failure to de-congest traffic.
Unless there is a clear-cut and compelling business model, PPP projects won’t work. Mr Gowda could, perhaps, take a cue from the Adanis’ Kutch Railway Corporation where the Adani group built the railway line for port connectivity — it was a win-win situation for both, the railways and the Adanis.
Incidentally, the stock markets gave the Rail Budget the thumbs down as they felt the minister was not serious about PPP. They expected the minister to hand over railway stations to them to run. Instead they are being given peripheral jobs of cleaning, sanitation and catering. This would, of course, benefit the medium and small companies, as well as the passengers.
A positive boost for freight in the Rail Budget was Mr Gowda allocating most of the funds for 2014-15 towards building capacity. For years Indian Railways has been losing out to the road sector on this count — its market share, despite its impressive network, stands at a meagre 31 per cent.
Parcel handling is also going to be given a big boost with new terminals from which special parcel express trains with newly designed parcel vans would be run. This will de-congest platforms and reduce stoppage and turn-around time.
Though Mr Gowda kept from announcing any populist projects, he did announce low-cost, high-speed solutions which involve enhancing speed from the present 110 kmph to 160 kmph on routes such as Delhi-Agra (which had a successful trial run recently), Delhi-Chandigarh, Delhi-Kanpur and Mysore-Bengaluru-Chennai, among others. Though 300 kmph may be a distant dream, the low-cost option connecting cities within a 500-km radius of metros could prove to be a gamechanger. While it would, no doubt, drastically reduce travel time, there is also the possibility of it slowing down migration to major urban centres from Tier 2 and Tier 3 cities. It may even start reverse migration for those who prefer the more relaxed and tension-free life of a small city to living in a crowded metro. It would be ideal to link Mysore to Bengaluru, and ultimately Chennai, which is already on Mr Gowda’s low-cost, high-speed projects list.
Mr Gowda’s budget also had some high-tech initiatives in the area of communication, including GPS-based tracking of trains on a real-time basis, and the PRS (Passenger Reservation System) being upgraded to issue 7,200 tickets per minute, with 1.2 lakh people accessing it simultaneously!
Mumbaikars will soon get 84 brand new EMU (electric multiple unit) coaches manufactured by the Integral Coach Factory, the railway’s in-house manufacturing facility at Perambur, near Chennai, to run on the recently-converted 25 KV system. This will have a big impact in reducing overcrowding in the locals.
However, a major departure from the past budgets has been the railways providing a major boost to eco-tourism in the Northeast and running special trains on religious pilgrim circuits.
Though he had received innumerable requests for additional stops on super-fast trains, Mr Gowda was firm in his conviction that such stoppages considerably impact long-distance passengers. He has, however, said he will review it after three months, but solely on the basis of commercial and operational considerations, which is bureaucratese for “axing” the requested stops in VIP towns and villages.
The writer is a former member of the Railway Board
