Freight rolling stock needs revamp

Railway upgrade should embrace new generation wagons by involving the private sector

Passengers of Indian Railways are travelling more comfortably — coaches are designed better, station amenities are more hospitable and trains are faster. The bullet train is adding fizz to expectations. The widely-publicised trial runs of the Spanish-made Talgo coaches, and the shift from ICF (Integral Coach Factory) coaches to the safer and better-styled LHB (Linke-Hofmann-Busch) coaches all add up to a visible effort to upgrade the passenger travel experience.
 
But as they whiz past, window-facing rail passengers still see the ubiquitous goods trains — “maal gadi” of yore — clunking steadily along. These drab goods trains — open or closed wagons with a guard van at the end — still look and work the same way as those decades ago. The recent protests by environmentalists about coal dust pollution in Goa from open wagons have further focused attention on modern designs for wagons.
 
Should not a modern, aspirational Indian Railways (IR) now also gear up for a major revamping of its freight rolling stock, particularly as it is fighting to increase its freight-share vis-à-vis road? After the track network, rolling stock (wagons and locomotives) forms the second most critical infrastructure component of the rail system, and freight wagons constitute the most important revenue generating asset.
 
In a recent article in this paper, Dr. Bibek Debroy, chairman of the Economic Council to the Prime Minister, opined that “despite an electronic system of tracking wagons, their numbers cannot be declared with certainty”. His best guesstimate (after factoring in various equivalent units’ adjustments) is about 220,000. 20,000 more wagons are owned by container train operators — half of that by Concor, an IR subsidiary. America has 1,500,000 wagons, Russia 1,200,000, Europe 700,000, and China over 700,000. A quick review of stock of railway wagons vis-à-vis rail-freight in markets like the US, EU and China reveals that India has quite a deficit. It is also believed that a substantial part of the wagon fleet is obsolete when compared to global standards.
 
The limitation on financial resources faced by IR over the past many years has compelled IR to curtail the quantity of freight wagons procured. Against a planned procurement of 25,000-30,000 wagons per year under its Vision 2020 goals, IR has had to stretch itself to procure 12,000-15,000 wagons per year in the recent past. It is not that IR is not cognisant of this situation. Over the past few years, it has taken various initiatives for augmenting the freight wagon fleet by inviting private participation in select freight segments. This has been done through schemes like Special Freight Train Operator Scheme, Wagon Leasing Scheme, Liberalised Wagon Investment Scheme, and Automobile Freight Train Operator Scheme. However, most of them have had limited or negligible success. With the western and eastern dedicated freight corridors getting operational in a few years’ time, it is all the more important to ensure that an adequate quantity of rolling stock with efficient designs and technology is made available.
 

OFF TRACK Against a planned procurement of 25,000-30,000 wagons per year under its Vision 2020 goals, Indian Railways has had to stretch itself to procure 12,000-15,000 wagons per year in the recent past. Photo: Reuters

Global trends have shown that over the past two-three decades railroads have focused their financial resources on investment in track infrastructure with the ownership of wagons largely shifting to the domain of private players, such as shippers, operators, wagon leasing companies and financial institutions. Around 2014, only 22 per cent of wagons were owned by the railroads in the US. In India less than 8 per cent of the rolling stock is owned by private players, of which more than 50 per cent is owned by Concor.
 
A section of IR’s bureaucracy believes that a widespread private ownership of wagons will erode IR’s captive customer base and hence impact its already stretched financial position even more adversely. This apprehension is quite misplaced. Non-availability of adequate track capacity is another reason often brought up by IR officials for restricting the private ownership of rolling stock. This further emphasises the need to free up every possible financial resource for investment into expanding track capacity.
 
Over and above numbers and ownership, there have been rapid changes in the design and operation of wagons. The world over, wagon design has become very industry-specific with attendant benefits in the logistics chain. So, there are wagons for transporting goods in powder form (like cement) and unloaded by compressed air; wagons for livestock, wagons with sliding roofs, refrigerated wagons and the like. In 2011, Amul flagged off the country’s first dedicated “Milk Train” from Mehsana to Delhi.
 
The time has therefore come when allowing privately owned railway wagons of all classes would help India in many ways. It would make more money available for investment in rail infrastructure, since IR will no longer need to invest in buying or leasing more wagons through the Indian Railway Finance Corporation. Owners of private wagons will be more likely to ensure that they are on the move — giving IR higher revenues through more haulage fees. More privately owned wagons will increase the supply of wagons for customers of railways, who may have otherwise used roads in their absence. Privately owned wagons will offer better monitoring and control to their customers. This will allow big users of bulk commodities — coal, power, cement, automobiles and others — to lower their logistics cost, increasing the competitiveness of Indian industry. India’s wagon manufacturers will be revived with new orders, new technologies and new designs, thereby giving a huge fillip to the “Make in India” objective.
 
India’s economy and its railways are paying the price for ignoring rail wagons. It is time to change that, by bringing private players into the game in a big way.

The author is chairman of Feedback Infra. vinayak.chatterjee@feedbackinfra.com; Twitter: @Infra_VinayakCh