MAKE RAILWAYS A PREMIER LOGISTICS & PASSENGER SOLUTIONS PROVIDER : PHD CHAMBER

In its Memorandum for the Railway Budget 2010-11 to the Ministry of Railways, PHD Chamber has highlighted the urgent need for new initiatives by the government to make railways a premier logistic and passenger solutions provider.

The high transaction cost arising from an inefficient transport sector is preventing the economy from realizing its full growth potential, regardless of progress on other fronts. Improvement in the quality of transport infrastructure is an essential pre-requisite for competitiveness and high economic growth. Rail transport is a vital element of infrastructure and one of the key elements for global competitiveness.

PHD Chamber has stressed that more freight would come to Railways only if they become more price competitive, provide economical rates, adequately address capacity constraints on the high density corridors and the connecting network, improve terminal management, upgrade rolling stocks and more importantly move goods with speed and safety.

A lot of freight traffic is lost to roads because of poor connectivity to ports and warehouses which the Railways needs to address, especially for exports and imports.

It has been further highlighted that the Railways proposal to generate the projected requirement of Rs.14,00,000 crores in order to realize the targets stated in the “Vision 2020” from internal resource generation and various extra-budgetary resources (including PPP and support of State Governments), as well as Budgetary support, is not feasible. Therefore, according to the PHD Chamber, the Railways needs to urgently improve its attractiveness for private investment to fulfill its Vision. The PHD Chamber has strongly recommended that the Ministry develops a policy statement communicating Railways’ PPP vision and the road-map for the same.

The Chamber also seeks identification and announcement of specific sites under unencumbered ownership of the Railways classified under two categories – vacant land and non-vacant land - and projects (e.g. cold storage, rural handicraft workshop, etc) that are suitable on these sites. Based on the above-stated findings, invitation from the private sector could be invited for development of the projects on the identified site on revenue sharing basis on BOOT model or its variants. The route for PPP could be either through press advertisement or on the basis of Swiss Challenge concept.

Multifunctional complexes should be developed under PPP mode at major city stations. This will help in reducing the movement of persons from railways stations and the office / malls / picture halls / eateries, etc. and will generate additional revenue for the Railways.

To enhance the efficiency of the Railways the PHD Chamber also wants the Ministry to focus only on core services such as the operation and maintenance of railway transport, rolling stock, freight management, etc. The non-core activities such as canteen, refreshment, pantry services and the like should entirely be run on PPP basis through corporate framework. Consequently, the resources of the Railways would be effectively harnessed for the core activities, leaving the non-core activities to those in the private sector having the requisite specialization.

In this context, PHD Chamber has suggested that the existing corporations of the Railways such as IRCTC, IRCON, RITES and other similar entities should be considered to be placed on PPP route through disinvestment of share holdings and/or injection of fresh capital or a combination of both.  

The lease rental for Railway land, which is the basis for most PPP projects, should be more economical and attractive to the private investors according to the PHD Chamber.

The PPP Mode also needs to be considered afresh for developing high speed passenger corridors, multi-modal logistics parks, development of world class stations.

The Indian Railways should introduce innovative train services, to attract customers to shift from road to rail. 

In order to enhance the freight carrying capacity, the Ministry could consider introduction of double-decker (2-tier rakes) goods’ trains to double the freight capacity. The problem of the low level overhead wires should be appropriately solved for its successful implementation. It is also suggested that equal if not greater priority in movement be given to the goods trains like that given to some passenger trains such as the Rajdhani, Shatabdi, etc. 

The Ministry has also been requested to refrain from frequent increase in haulage charges to give a boost to the container rail sector that was opened to private investors about three years ago but has met with a limited success.

It is has also been requested that the basis of calculation of wharfage and demurrage charge be modified from hourly to daily basis.  The permissible free time should be extended to at least two / three days and the free time be considered from the opening time of the office.

The Wagon Investment Scheme (WIS) and the Terminal Incentive cum Engine-on-Load Scheme (TIELS) need to be revisited to give a fillip to the PPP. The work on the DFC also needs to be rejuvenated.

Improvement in passenger amenities by the railways should be an important objective to increase the passenger traffic. Hygiene and cleanliness should be an important activity for day to day monitoring. Platforms should be constructed with smooth and durable materials, so that these can be kept clean with minimum efforts and last long. This will also give a boost to domestic and foreign tourists traveling by train. 

Indian railway has an important role to perform in sustaining higher economic growth. Hence it is important that the investments and plans announced for the development should be implemented in time bound manner and milestones are specified for completion of the projects according to the PHD Chamber.

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