Ad Here  
April
May
June
July
August
September
 
 
The loser is … CRICKET The right to reject Flight into danger Of discrimination and rights End of the world and the moving finger... The death of cash The return of the muffler man Culture of suave, gentle and British becoming extinct... WAR-MONGERING and a national pastime Resolving disputes: Scotland, Ajit, Dhoni The other side of the Olympic divide Two leaves merged? People vs. Collins Of mercy petition and mercy killing What a judgment Sir-ji Editor unplugged The case of the suspicious husband A ride around the city Bleeding Blue Being taken for a ride A judgment that shocked a nation’s conscience FITTING farewell The broken window Lovely Banking experience PM Watch Psephologists fail the wisdom of crowds The flawed “Pakistan policy” Educational shame Walking into the sunset 500/500 The KING is a fugitive Throwing ink is fine Privatise the Railways Nitish swords Modi Why we get a compromised deal Sehwag...No soft edges The fight along the border The future is here A troubled fortnight Two more for Modi The curious case of the missing maid Rajiv killers escape the gallows Modi sells a Dream? Noise on Social Networks Cracking the CA code The car dealer and the cabbie stories… Britain lobs a bomb. But it won’t explode. Waylaid on the National Highway Odd-Even Plan RaGa bowls a decent over Brick gets pricked The wily old fox From Gungi Gudiya to Iron Lady the lost generation... Greater than the greatest ?
 
Privatise the Railways
There are a few mega churns that any Indian government needs to do across the next 2500 days, if we are to shift gears to race forward.
THE NEXT 2500 days are important because at the end of it India would have been married to market economy for 30 years; and 30 years is a long time even in the life of a nation.
It is time that the government seriously looked at part privatising the railways. The money can be used to modernise railways.  Let me explain the background and the way forward.

India established its railways in 1853, a good 24 years ahead of China. By 1947, Chinese railway was 50 per cent the size of Indian railway. By 2010, China’s network is 50 per cent ahead of India!

China freight carriers clock 120 kmph against our 26 kmph. China’s passenger trains run at 200 kmph. India’s “super fast express” manage an average speed of 60 kmph!  China is now concentrating on ‘350-400 kmph’ passenger dedicated lines (PDLs).

To catch up, Indian Railways need to improve efficiency and invest heavily. We need bullet trains that would run at 350 km/hr. But where will the money come from? In a country where FDI is a dirty abbreviation, privatisation is one route. In fact it and it alone would harness innovation, bring investments and unleash the animal spirit.  
Take China for instance. The Chinese railway business is broken into five major railway corporations each handling a specific function. Each is autonomous, although state-owned. A number of passenger and freight companies have been created to operate on a competitive basis.

Slack on the track

If Indian Railways doesn’t modernise fast, it will quickly become a basket case. Consider these:
  • Our operating ratio for 2012-13 is 88.8  per cent, whereas it is 75 per cent for Chinese railways.  Part privatisation will pull the railways out of its slumber.
  • Our revenue per passenger km is just 22 per cent of revenue per tonne km. In contrast, commuters in China, Korea and France pay 1.4 times more than those who move cargo by rail. Part privatisation will take pricing to its correct levels.
  • Our infrastructure is inadequate. We carry 6.2 billion passengers every year, yet since 1950-51, our route-kilometres have increased by just 18 per cent. Private ownership can turn railways into gold.

Way forward

  • It’s time for the elephant called Indian Railways to dance.
  • We need big ticket investments. We need bullet trains that run at 300 km/h that would ease our air traffic. Some estimates place today’s  cost at Rs 10,000 lakh (a k a 100 cr) per km. At that level, the Chennai-Bangalore route of 330 kmkh will cost Rs 33,000 crore. Quick calculations suggest that to profit, passengers should be charged Rs 5 per km; in this case Rs 1650. This is about $33 or $0.10 per km, which is on par with pricing in the US. That’s fine; as you would reach Bangalore in 75-minutes flat. Contrast this with a 1st A/c price on the Shatapdi and you notice that this is only about 70 per cent more.
  • We must adopt differential pricing. Peak hour rates have to be different from the non-peak hour rates. The lower berth must be priced  higher than the upper berth.
  • Railways is sitting on 43,000 hectares of vacant land whose current market value is Rs.22 lakh crore. Let’s convert that into cash. To the private investors provide tax breaks. Name stations        after the funding corporate. Place advertisements inside and outside the bullet trains. Railways have it in them to work as efficiently as corporate India and give airlines a run for their money. 
Author :
Reported On :
Sector :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com