Merger of Rail Budget with Union Budget – Main Focus now needs to be Market Driven: Umesh Chowdhary/TWL

Dedicated Freight Corridor will start in 2019, hoping that Freight Traffic moves from Road to Rail, he states. In a chat, Umesh Chowdhary, VC & MD, Titagarh Wagons talks about Rail Budget and expectations from it.

Q: Against the backdrop of heightened expectations and what is going to happen on fronts like rail linkages, electrification, coach wagon manufacturing, high speed rail, focus extremely on railways in the first budget wherein the rail budget is going to be part of the Union Budget, it is not going to be a standalone entity. What is it that you are expecting for your industry?

Umesh Chowdhary: I really do not think that railway be budget not being standalone entity and being merged with the Union Budget is an issue at all because what had happened is over the last several years railway budget had been relegated to three thing. Number one, announcing of the new trains; number two, giving their operational results and the third was some policy announcements. And as far as my view goes, policy announcements in today’s dynamic market needs to be dynamic and you cannot have one set of magic policy announcements on the 24th or 26th of February and wait for the next year of 24 or 26th of February to make the next set of policy announcements. They have to be all year round depending on what the market needs.

As far as the numbers are concerned, in any case, they have to be merged with the balance sheet of the consolidated fund of India. And as far as the railways progress is concerned, I think yes I have always maintained that it is a very-very monolithic organisation, the progress for it to get visible takes time. There is a lot of track capacity that is being built up. There are a lot of procedural changes that are happening. What now needs to be probably done is that once that so much of investment has gone into the infrastructure, the railways need to concentrate on generating the necessary revenue out of that infrastructure which means increase their throughput by increasing the rolling stock investments and so on and that is what we are expecting to happen…

Q: You would agree with me that in our earlier conversations, we were painting a very different picture for railway, railway capex and the impact it will have on private sector capex. But if I look at the numbers which we have got from Titagarh or from your counterparts or from some peer companies, they are not tallying together. I mean if I take our conversations one year forward versus where they are right now in terms of railways commitment and companies ability to scale up the railway business two and two are not matching.

Umesh Chowdhary: I have always maintained that the railway capex is always done in two phases. First is capacity creation and then the capacity utilisation. As far as our business is concerned, we are in the rolling stock which is the capacity utilisation phase. The railway capex that has happened in the last two years was in the capacity creation stage and I am very positive, once you created the capacity, then it is like an airline seat or a hotel room. If you do not utilise it at any price whatever the market can pay, you need to utilise that capacity and in order to do that, you need rolling stock and that is where companies like us or our peers come in wherein the rolling stock demand we foresee that in the next couple of years should really scale up quite substantially and that is what I was mentioning in the beginning that the capacity has been created.

A lot of areas, if you look at the entire railway network, there were certain areas of bottlenecks. What the Railway Ministry did was that they concentrated on debottlenecking those routes so they doubled, tripled, quadrupled some of the bottlenecks track areas and now with that kind of capacity available, the DFC hopefully starting off in 2019.

The main focus of the railway now needs to be market driven which is making sure that the traffic moves from road to rail and that is what we are really looking forward to now.