11/4/2019 Modi’s plan to modernise India’s railways: too little, too late (just like the trains)? | South China Morning Post

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Modi’s plan to modernise India’srailways: too little, too late (just likethe trains)?With the state’s monopoly train operator running at a frequentloss, Modi is seeking investment from the likes of Hong Kong’sMTR and Singapore’s SBS to liberalise India’s railwaysRegional transport players are keeping a close watch on theTejas Express, a new semi-autonomous train service that isseen as a pilot test for Modi’s vision

Topic |   India

Vasudevan Sridharan  Published: 10:30am, 2 Nov, 2019

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On October 19, some 450 passengers who bought tickets on the Lucknow-Delhi TejasExpress were forced to wait nearly four hours for the train service, which had beenlaunched only two weeks earlier.

The train, run by the Indian Railway Catering and Tourism Corporation (IRCTC), leftLucknow at 9.55am instead of its scheduled time of 6.10am, after it was reportedlyheld up by maintenance work.

The 500km journey back to Lucknow departed at 5.30pm instead of 3.35pm, causinganother delay, this time to 500 passengers.

While such lengthy delays are the norm for the 20,000 passenger trains that runacross India [1] every day, the IRCTC made the unprecedented move of partiallycompensating its customers for experiencing travel disruptions.

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The Tejas Express began running on October 4. Photo: Twitter

Under the company’s travel insurance policy, Tejas Express passengers would receiverefunds of 100 rupees (US$1.40) if a train is late by up to an hour, or 250 rupees fordelays of two hours or longer.

The October 19 disruption is expected to cost the IRCTC some 162,000 rupees incompensation.

PILOT PLAN

The launch of the Tejas Express line comes as New Delhi plans to liberalise thenation’s networks by introducing as many as 150 privately-operated trains on 50routes over the next four years.

Under the government’s plan, the state will retain control over core railwayinfrastructure – including tracks, stations, maintenance facilities, locomotives,drivers and personnel – but outsource the service operations, catering andhousekeeping to non-state entities.

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The new service by the IRCTC – a subsidiary of the state-owned Indian Railways, thecountry’s largest employer with 1.3 million workers – was meant to be a litmus test toassess the operational adaptability and commercial potential of the railway network.

“It is the �rst corporate train of the country. I congratulate the �rst batch ofpassengers travelling in it and hope such initiatives are taken to connect other citiesas well,” Uttar Pradesh Chief Minister Adityanath told the Press Trust of India onOctober 4, the opening day.

IRCTC@IRCTCofficial

Maiden run of Lucknow-New Delhi-Lucknow #TejasExpress. The professional staff has been deployed to provide food & beverage services to the valued passengers on-board.

322 4:54 PM - Oct 4, 2019

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“I thank Prime Minister Narendra Modi and Railway Minister Piyush Goyal for givingthe �rst corporate train from the biggest state to Delhi.

“This is a competitive era and there is need for environment-friendly publictransport to be accepted in society,” he said.

The Tejas Express comes equipped with a host of facilities and services, such as on-board entertainment, vending machines, travel insurance, home-to-destinationluggage pickup and airport-like lounge access. A ticket for the six-hour journey startsfrom 1,125 rupees – and dynamic fares often outperform airfares on the same route.

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[5]

Mirza Baig, a Lucknow-based businessman, was among the �rst passengers to boardthe train on its launch day. While he was initially impressed with the services andfacilities, he said his successive trips were a letdown.

“On my return journey on October 5 when I was travelling with my family, there wasdirt all around us. When we called the coach attendant, he replied that it would getcleaned in ‘a few minutes’, but I waited nearly �ve hours to get it cleaned,” Baig said.

“On my third trip, it was so disappointing to see that they were not giving attentionto passengers,” he added.

Another passenger, Swayam Tiwari, said the Tejas Express did not live up to the hype.

“Cost-wise, it is more expensive than, say, the Lucknow Shatabdi. Features [are]nothing great … The Wi-� is erratic,” Tiwari said. Such feedback does not bode wellfor the Indian Railways behemoth, which has been running the world’s fourth-largest railway network as a monopoly train operator for well over a century.

Ministry of Railways@RailMinIndia

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The organisation’s scheme to modernise the train system is part of the 100-dayagenda of Prime Minister Narendra Modi [9], who began a second term in May thisyear.

Indian Railways’ passenger trains are heavily subsidised and its operational loss runsinto more than 330 billion rupees, although the pro�table freight tra�c partly makesup for the losses.

Lucknow-New Delhi-Lucknow #TejasExpress will commence it’s first return journey today from New Delhi. The professional staff has been deployed to provide food & beverage services to the valued passengers on-board.

1,307 1:48 PM - Oct 5, 2019

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Trains across India have been operated by Indian Railways for over a century. Photo: Reuters

To realise Modi’s vision, the federal government recently formed a working groupcomprising senior o�cials – including Amitabh Kant, chairman of the state-backedpolicy think tank Niti Aayog, and Railway Board chairman KV Yadav – to developIndia’s railways to international standards, and to oversee the bidding process.

Final agreements with successful bidders are expected to be signed by the end of nextyear.

“[The government’s plan] is something which can be done only in stages. What wasbeing done on an experimental basis was the right way to go about it,” said MadanSabnavis, the chief economist of credit-rating �rm CARE Ratings.

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“The most complicated aspect is how they [private players] will use the railwaytracks to run trains without interfering in the current state of a�airs,” said Sabnavis,raising the dilemma of whether Indian Railways should outsource lucrative routes toattract investment, or retain them for revenue.

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[10]

Harsh Dhingra, a transport expert and former chief of vehicle producer BombardierIndia, said private players were expected to bring in their expertise to improve overalle�ciency on economically viable sectors and routes.

“Expectations are that rolling-stock companies like China’s CRRC, South Korea’sHyundai Rotem, Germany’s Siemens or Bombardier, France’s Alstom, and Spain’sTalgo or CAF may be keen,” Dhingra said.

“Also, operators such as Hong Kong’s MTR, Singapore’s SBS, Korean Rail, Germany’sDV International and the UK’s First Group would be more than willing to pitch in,” hesaid.

“All of them are watching,” Dhingra said, adding that there was a possibility that aconsortium of transporters could be formed to tackle the challenges. “Indiancompanies may join hands with these operators to bring the cost of operationsdown.”

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Indian commuters alight from trains in Mumbai. File photo: AFP

WILL IT WORK?

Modi’s plan is not a new one. Past attempts to herd private players into the highly-integrated railway system previously derailed due to a variety of factors, includingbureaucratic hurdles, reluctance from within government, and vocal opposition fromtrain workers.

Railway unions have warned that such an initiative would create “industrial unrest”.

These concerns have driven the Modi administration to repeatedly clarify that it isnot intending to completely privatise the railways, but to increase the participation ofnon-state actors to increase pro�tability.

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“There is no question of privatisation of Indian Railways. That’s a complete no-noand a red line,” said Railways Minister Piyush Goyal last month, in response toconcerns raised by railway workers.

“What we are looking at are ways to increase investment �ow in the railways throughpublic-private partnerships.”

Government o�cials and Indian Railways were not available for comment.

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[11]

With competition coming from multiple areas, the path for investors is far fromsimple. Sabnavis from CARE Ratings noted that private operators have to justify anyhigher-value o�erings and also go head to head with airlines.

“Luxury coaches and increased amenities have to be provided [by private operators]if one were to charge higher rates to train passengers. And they’re going to competewith the airlines at some point, given the pricing,” he said. “Flying has the advantageof timing.”

But he noted there were areas of revenue that could be pursued by private players.

“Train stations can be major revenue earners in terms of advertising or otherfacilities,” he said. “We can replicate what is happening in the airports.” ■

Source URL: https://scmp.com/week-asia/economics/article/3035989/modis-plan-modernise-indias-railways-too-little-too-late-just

Links[1] https://www.scmp.com/topics/india[2] https://twitter.com/hashtag/TejasExpress?src=hash&ref_src=twsrc%5Etfw[3] https://t.co/YqF8C7bwQd[4] https://twitter.com/IRCTCo�cial/status/1180081189740138496?ref_src=twsrc%5Etfw[5] https://www.scmp.com/week-asia/economics/article/3024120/india-modi-betting-big-electric-vehicles-does-he-need-chinas[6] https://twitter.com/hashtag/TejasExpress?src=hash&ref_src=twsrc%5Etfw

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[7] https://t.co/yvYmqrXaeW[8] https://twitter.com/RailMinIndia/status/1180396901683748865?ref_src=twsrc%5Etfw[9] https://www.scmp.com/topics/narendra-modi[10] https://www.scmp.com/week-asia/society/article/3001879/japan-defends-it-vietnam-stretches-it-india-ignores-it-asia-time[11] https://www.scmp.com/news/asia/diplomacy/article/2140772/narendra-modi-vows-connect-include-kathmandu-indian-rail-network