Indian Railways set to get modern ‘Make in India’ locomotives; check out images and facts.
The decision to set up the Rail Development Authority of India is being seen as the most important action taken so far to bring about institutional change for reforms in the biggest departmental undertaking of the Government.
If the authority does become all that it is being cracked up to be in news reports based on official briefings, then that is all for the good. But the first point to note is that it is being called an ‘authority’ with the word ‘regulatory’ not there in its name, as is the case, for example, with the insurance or telecommunications regulators.
To go behind nomenclature into substance, let us take a look at the press release outlining what the authority will do. These can be divided into two categories.
Some of the regulatory functions listed are: pricing of services commensurate with costs, protection of consumer interests (‘rights’ would have been a better word), ensuring competition, creating a positive environment for investment, and providing a framework for non-discriminatory open access to the dedicated freight corridor.
Some of the developmental functions listed are: promote efficiency and economy and absorption of new technology (to deliver on quality of service and cost optimisation), market development, benchmarking of services against international norms, and human resources development. So far so good but there is a total giveaway in the last sentence. Towards these ends the authority “shall make recommendations to the government for appropriate consideration/decision”.
Thus, the Rail Development Authority will do all kinds of sums and lay down all kinds of norms but at the end of the day it will be an advisory body. It will be up to the railway minister of the day to accept the authority’s advice or not. As ministers and governments come and go the threshold of willingness to accept advice will rise and fall. An ‘advisory regulator’ is an oxymoron, a contradiction in terms, like say, ‘virtual reality’.
The authority will have five members, including a chairman, who will be identified by a search and selection committee headed by the cabinet secretary and three others, all from within the Government. Among them will be the chairman of the railway board who will in a sense find persons from whom he will take orders up to a point.
The chairman and other members of the authority will naturally have special knowledge in fields like infrastructure, railways, law and even consumer affairs. But, it is to be noted, none of the selectors will be an eminent non-government person in the field of consumer affairs.
It is to be hoped that the authority will in good part act as an adjudicatory body which will give an award in, let us say, a dispute between the railways and a concessionaire like a freight train operator or a special purpose vehicle. In the railways concept paper on the basis of which the authority has been approved, the word ‘adjudication’ does not appear but ‘adjudication fees’ as a source of revenue does. We can assume that what emerges from the exercises of the authority and its appellate body will have the necessary finality. But it remains to be seen how much of an adjudicatory, as opposed to a developmental, role the authority finally has.
Time for change
It is important to raise these issues because the railways, particularly well-spoken reform-minded railway ministers, have been long on the need for reform but till now little has changed. In fact, the merging of the railway budget with the Union budget has been a retrogressive move. A clear casualty has been easy accessibility of data.
Till last year’s budget, a lot of data used to be easily available through the explanatory memorandum which this year is difficult to find. It is not that the data cannot be culled from elsewhere in the general budget papers but not as easily as before. Particularly useful was the table on ‘Railway Funds’ with the closing balance telling you if the funds were being drawn down or not. This readily accessible table is no longer there. According to a former financial commissioner, the railways have become much more “opaque”.
Among the power of the authority, the concept paper mentions “dissemination of information”. It will publish reports and investigations and, in particular, convey its decisions through publicly available documents. What is important is a public discussion on an issue before a decision on it is taken. If the authority makes the railways less opaque, then that will be a great plus.
The need for a regulatory authority had become acute over the years with railway ministers refusing to raise passenger fares, thus leading to freight revenue subsidising passenger traffic more and more, and consequently adding to the costs of industry. It was then felt that if an independent regulator handed down a revision of fares and freight rates which the railways had no option but to accept, then that would take the political sting out of the decision.
But today the situation has changed. With the number of passengers using the railways stagnant in recent years and freight carried last year not even reaching the previous year’s level, market conditions are such that raising fares or freight rates at this juncture will drive away business even more.
The need of the hour for the railways is not the ability to raise prices (fare and freight rates) but the ability to cut costs and canvas for fresh business. This will come from the organisation being corporatised and made to function professionally. If you need proper corporate planning and forecasting for that then it can be done in house. There is no need for a separate think-tank in the form or a development authority to deliver that.
The writer is a senior journalist and the author of ‘Made in India: A Study of Emerging Competitiveness.
To provide guidance on quantity and quality of service
India’s first rail regulator, Rail Development Authority (RDA), would not just look at tariff structures for passenger and freight operations but also set standards of performance and efficiency that would be enforceable under the Railways Act.
“RDA can define standards of performance and efficiency; such standards would be notified as rules under the Railway Act to give a binding force upon acceptance,” said a resolution dated May 5 approved by the Railways Board, inching a step closer toward setting up a rail regulator.
The regulator will set “standards for efficiency and performance for consumer satisfaction in both passenger and freight” and will also be “authorised to check for deviations and suggest remedial measures.”
“The regulator will provide guidance on quantity and quality of service provided to passengers. These may include setting standards including hours of service, frequency of trains, capacity per coach, cleanliness level, and quality of water, food, furnishing and linen,” said a senior Railway Ministry official.
The Union Cabinet had last month approved setting up the rail regulator responsible for recommending passenger fares, setting performance standards for rail operations and creating a level playing policy for private sector participation.
The resolution states that the regulator will be mandated to “suggest measures for absorbing new technologies for achieving desired efficiency and performance standards.”
The Railway Board also defined the structure of the RDA with a Chairman along with three members each for tariff, public private partnership and efficiency, standards and benchmarking.
The regulator will, however, not involve itself in policy making of the Indian Railways, operations and maintenance of the rail system, financial management, setting technical standards and compliance of safety standards, the resolution said.
It clarified that the regulator would only make recommendations on tariff and not impose a tariff on the Indian Railways.
The Indian Railways will float global tenders worth over Rs 100 crore for acquiring sophisticated equipment to run 1000 trains without guards. The End of Train Telemetry (EoTT) equipment is used to establish communication between the locomotive driver and the last wagon of the train to ensure that the train is running with all coaches/wagons as a complete unit.
The equipment is designed to do the guard’s job by giving indication to the loco driver in case of parting of coaches or wagons from the rear side of the train.
Each set of EoTT device is estimated to cost approximately Rs 10 lakh. EoTT system comprises two units – one unit called cab display unit (CDU) fitted on the locomotive and the other is sense and brake unit (SBU) fitted on the last coach or wagon of the train.
Both the u nits are fitted with radio transmitter which communicate with each other. In case of a train parting, the system is designed to indicate to the driver the parting of the train and to apply brakes to the rear unit, thus averting collision of the rear portion with the front portion of the train.
Railways will acquire 1000 EoTT equipment to begin with for its container operations and later more such unit will be procured for all trains. All goods trains on the proposed dedicated freight corridors will run with EoTT system.
“We will invite financial bids for acquiring 1000 EoTT equipment in the first phase,” said a senior Railway Ministry official involved with the project. The official said the EoTT equipment is used to establish communication between locomotive driver and the last vehicle of the train to see that the train is running with all coaches/wagons as a complete train.
There is a transmitter fitted on a locomotive and a receiver that is fitted on the end of the last vehicle. The transmitter and the last vehicle receive exchange signals at regular intervals to ensure that the train is running intact.
If there is a break in the communication between the two units, the driver gets a signal that the train has parted, the official said.
The transmitter unit, fitted at the end of the train’s last wagon is connected to the brakes and it exhausts the brake pipe air and applies brakes to the broken away portion of wagons so that they do not collide. Railways had earlier undertaken the trial run of the EoTT system successfully.
The EoTT system in 1000 trains is expected to be operational in the current fiscal.
Among five dedicated freight corridors mooted in the country, the one in the East Coast is most viable due to huge demand for movement of freight, Divisional Railway Manager M.S. Mathur said here on Tuesday.
Speaking at a trade meet organised with the stakeholders by the Visakhapatnam Port Trust here, he said there was a lot of scope for improving the connectivity in the East Coast Railway.
He said the dedicated corridors would be more viable due to heavy demand to transport coal and iron ore. “We are hopeful that it will come as part of thrust on capacity augmentation,” he said.
Mr. Mathur said the focus was now on doubling of lines and taking up of work on new lines for speedy and hassle free evacuation of cargo and mentioned how work was in progress to expand the Rayagada-Vizianagaram line and Kothavalasa-Kirandul line.
Stating how they were now firming up funds to complete projects sanctioned so far, he said as of now the projects sanctioned needed a massive investment of Rs. 4 lakh crore.
The DRM said they had finalised a loan to the tune of Rs. 1.5 lakh crore at a concessional interest rate from LIC. “We are now open to joint venture route and involving the industries and the State governments for capacity augmentation,” Mr. Mathur said.
Indian Railways (IR) is well on track to achieve its goals of reducing fuel costs and carbon footprint through electrification of routes. Should the targeted timelines be met, 90 per cent of all broad-gauge routes would be electrified by fiscal 2021.
Sample the aggression: As on April 1, 2016, at 28,000 route kilometres (rkm), the level of electrification was less than half of the broad-gauge network of 59,000 rkm, with the target for electrification at 18,000 rkm over fiscal 2016-20. In November 2016, an action plan prepared by IR raised this target to 24,000 rkm in 5 years (fiscal 2017-21). In line with this, the proposed physical target for fiscal 2018 has been ramped up to 4,000 rkm (up from 2,000 rkm targeted in fiscal 2017 and 1,730 km commissioned in fiscal 2016). The plan, thereafter, is to touch 6,000 km every year.
The push has been supported by a sharp revision in allocations — with the latest Union Budget revising the targeted spend for fiscal 2017 to Rs 3,500 crore from Rs 2,800 crore and proposing a similar outlay for fiscal 2018. For scale, the outlay is 55 per cent higher than the spend in fiscal 2016 and almost three times the average spend over fiscal 2013-15.
Moreover, for accelerated execution, electrification projects are being funded under EBR (institutional finance). Also, IR has joined hands with three public sector undertakings — IRCON, RITES and PGCIL — and expects to reduce its fuel bill by Rs 10,000 crore annually through electrification of major routes.
Still, CRISIL believes the ramp-up would be slightly slower, as contractors would need some time to scale up. Also, the upward bias to electrification outlook is subject to availability of funds and electric locomotive capacity. State-owned electric locomotive manufacturer Chittaranjan Locomotive Works, which is currently operating at a utilisation of over 100 per cent, manufactures only 280 units per annum. Alstom, which will only manufacture 12,000-hp electric locomotives, is expected to start production from 2020 and will slowly ramp up from 30 units initially to 100 units per annum.
CRISIL expects 15,500-16,000 rkm to be electrified between fiscals 2016 and 2020 at a total outlay of Rs 19,000 crore (with the cost of electrifying a double line at Rs 1.2 crore per km). This would be below the target, and could stretch the timeline to 2023, but impressive nonetheless considering the achievement in the preceding five years was 6,182 rkm, with the outlay at Rs 5,100 crore.
DFCs to operate with electrified lines
The two dedicated freight corridors (DFCs) on which work is currently underway will both sport electrified lines. The Western DFC will cover 1,504 km of a double-line electric (2 x 25 KV) track from Jawaharlal Nehru Port Trust in Maharashtra to Dadri in Uttar Pradesh (UP) via the Vadodara-Ahmedabad-Palanpur-Phulera-Rewari route. The Eastern DFC will cover a route length of 1,856 km, including an electrified double track of 1,409 km between Dankuni in West Bengal and Khurja in Uttar Pradesh, and an electrified single track of 447 km between Ludhiana (Dhandarikalan) in Punjab and Dadri in UP.
Cost economics favour electrification
The reason for the push is not far to seek. Electric traction is much cheaper and efficient compared with diesel traction. Currently, 67 per cent of freight traffic and 50 per cent of passenger traffic is hauled on electric traction. Yet, electricity forms 37 per cent of total traction fuel cost.
As such, running trains on electric traction is 50 per cent cheaper than diesel. A CRISIL Research estimate shows that after considering a capital expenditure cost for electrification spread over 6 years, the internal rate of return considering cost savings over the next 10 years works out to be over 25 per cent.
Among other factors in favour of electrification, electric multiple units (EMUs) are ideal for suburban services, which require higher acceleration and braking features for frequent starts and stops. The speed and throughput are also better and electrification generates 12-19 per cent of additional line capacity, owing to faster speeds. Then, there are advantages such as haulage of heavier freight and longer passenger trains at higher speeds, higher payload-to-tare ratio, integration of non-electrified routes with electrified ones for seamless movement, modernisation in areas such as signalling and telecom. To top it all, the carbon footprint is smaller.
The writer is director (industry & customised research), CRISIL Research