Railways suffered from under-investment, says ICAI, PHD joint study

IR infrastructure & investmentNew Delhi: A knowledge paper on the Indian Railways, prepared jointly by PHD Chamber of Commerce and Industry and Institute of Cost Accountants of India (ICAI) reveals that the public transporter suffered from under-investment between 1951 to 2014.

The paper said the track capacity addition of railways could grow at compound annual growth rate (CAGR) of a meager 0.7 per cent whereas it witnessed passenger and freight traffic growth of CAGR 3.1 per cent and 4.3 per cent respectively.

The paper titled ‘Indian Railways Transforming into an Engine of Growth’ states that “the resources have been insufficient for improving customer satisfaction and introducing technological improvements. Investments in safety have also been insufficient and the biggest challenge facing Indian Railways is its inability to meet the demands of its customers both freight and passenger.”

The paper released here by Union Minister of State for Development of North Eastern Region (DoNER) Jitendra Singh states that as a consequence, capacity augmentation has suffered and so the quality of service delivery.

According to the paper, due to low track km addition over the years, the high density networks of the Indian Railways are facing acute capacity constraints, 40 per cent of sections are running at 100 per cent or above line capacity showcasing the high congestion in the system.

More than 65 per cent of high density network is running at over 100 per cent utilization levels, the paper said.

It points out that Indian railways is equipped with train engines that can travel at a speed of 160 km per hour but due to old coach designs, the maximum speed they can travel at is 110 km per hour.

In India the main line tracks built cannot even sustain the trains travelling at a speed of 110-130 km per hour. Due to this, the average speed of the trains is hampered, it said adding that time required to travel is increased because of weak infrastructure.

The paper further highlights that while passenger segment utilizes 65 per cent of the resources, it contributes only 30 per cent to the revenues, whereas freight contributed 70 per cent but utilizes only 35 per cent of resources.

Cross subsidizing of passenger fares by artificially high freight fares has led to shift in favour of road transport, both in freight and short distance passenger traffic, it added.

Relates Posts: http://www.railnews.in/congress-responsible-for-railways-backwardness-railway-minister-suresh-prabhu/