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Monday, December 03, 2001

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Railways: Will bulk efforts put it on track?


Santanu Sanyal

REPORTS have it that after serving the Indian Railways for nearly three decades, Mr R. K. Thoopal is quitting as Member Traffic of the Railway Board. He will shortly be taking up assignments in an African country. Mr Thoopal was considered to be an efficient officer, and his expertise will now be at the service of a distant country.

Mr Thoopal is leaving at a time when the Railways is struggling hard to get traffic. The performance in the first half of this financial year was less-than-satisfactory, the shortfall from the target being substantial. The Railways only hopes that the situation will not be as bad in the second half. The hope may not be belied considering the trend so far in the second half of the year.

While several moves are afoot to attract traffic, mostly bulk, the thinking is to mobilising more non-bulk or piece-meal cargo, now accounting for a small share of the total traffic handled by the Railways. In fact, some concrete steps have already been initiated in this regard. For example, the Railways has joined hands with a Secunderabad-based road transport company to offer express cargo services between Mumbai and Kolkata. The success of the service, it is felt, might prompt the Railways to launch more such services.

Bulk items such as coal, ore, cement, raw materials for steel plants, finished steel items and petroleum products account for more than 96 per cent of the total traffic of the Railways. Unfortunately, the throughput of these items in recent months thanks to the recessionary situation in the economy has been at low ebb.

In the desperate bid to improve freight earnings, the Railways has decided not to spare any effort to handle even non-bulk traffic. The idea is attractive, but the question is: Will the volume of non-bulk traffic to be generated actually be worth the effort?

It is about 20 years now that the Railways took the conscious decision to concentrate on point-to-point rake movement of bulk traffic. But the Railways need not stick to such a policy indefinitely if the conditions warrant a change in the policy. The problem is that one is not sure if the ground realities today really merit such a change.

Consider first the volume of non-bulk traffic now being handled by the Railways. The share of such traffic will not be more than 3-4 four per cent of the total throughput. What will be the actual volume increase even if the present efforts yield 100 per cent result? Will it make much of a difference to the Railways total annual freight earnings estimated at Rs 23,000 crore or so? And at what cost to the Railways and the consumers?

The cost aspect is important because of certain operational problems. Thus, at many places, the marshalling yards, which used to handle break-bulk traffic, have been closed. At some other places, the lines have been rendered obsolete or services withdrawn.

All this means the efficient handling of the break-bulk traffic presupposes the reopening of some of erstwhile marshalling yards (already some talks are believed to be in progress in that direction) and restoration of some of the old infrastructure.

It also means greater dependence on road transport companies to ensure time-bound door-to-door service. Today, when the countrys road sector is poised for a massive expansion (given the widening of the existing National Highways and construction of the Golden Quadrangle), it will only make sense for the Railways to tie-up with the road sector for providing efficient services to consumers who are becoming increasingly discerning.

But, then, the private road transport companies will first make the consumers pay through their nose before paying a nominal charge to the Railways for the parcel vans hired by these companies.

The success of large-scale railway movement of non-bulk items also presupposes the fulfilment of certain other conditions. One is the introduction of fixed time freight trains with guaranteed transit time. Can not the Railways announce time-tables for goods trains just as it does for passenger trains? Another important issue is the need to expedite the claims settlement. The present system of claims settlement leaves much to be desired.

This is not to suggest that the Railways should abandon the present effort of handling handle more break-bulk traffic in partnership with private road transport companies. Important is to recognise that the area in which the Railways cannot claim to have the core competence is best left to a subsidiary organisation that can be floated in partnership with private firms.

Alternatively, it could leave the entire job of handling non-bulk cargoes to the Container Corporation of India which, as a freight forwarder and operator of containerised traffic through ICDs/CFSs for both domestic and international destinations, has not only acquired a certain amount of expertise but also proved its worth as a professional organisation.

In other words, the effort to mobilise larger volumes of non-bulk cargoes stands a better chance of success if the Railways decides to hive-off the operation into a highly focussed strategic business unit manned by a limited number of dedicated professionals.

Had he stayed on, Mr Thoopal, perhaps, would not have found these suggestions totally unacceptable.

Picture: To increase throughput, the Railways plans to attract more of non-bulk traffic. Will this pay-off?

 
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