[Economy] Dedicated Freight Corridors (DFC), High Speed Rail Corridors, Rail Tariff Regulatory Authority, Issues, Reforms in Indian Railways

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  1. Why Dedicated Freight Corridor (DFC)?
  2. Benefits of Dedicated Freight Corridor?
  3. High speed Rail Corridor
  4. National High Speed Rail Authority
  5. Rail Tariff Regulatory Authority
  6. Counter arguments: Rail Tariff Regulatory Authority
  7. India vs China: Railway success
  8. Rail Reforms Required
  9. Mock Questions

Why Dedicated Freight Corridor (DFC)?

  • For high GDP growth, we need lot of electricity =lot of coal need to be transported from mines to thermal power station.
  • For infrastructure (bridges, roads, buildings)= need fast transport of cement, steel, machinery.
  • Because of growing international trade via sea lanes= need to quickly transport products from factories to ports.
  • This has led to birth of Dedicated Freight Corridors along the Eastern and Western Routes in 2005.
Eastern Corridor Western Corridor
Start Ludhiana in Punjab Dadri in Uttar Pradesh
Via
  1. Haryana,
  2. Uttar Pradesh
  3. Bihar
  1. Haryana
  2. Rajasthan
  3. Gujarat
  4. Maharashtra
End Dankuni in West Bengal Jawaharlal Nehru Port Trust near Mumbai
When to complete? 2017 2016.
Length approx. 1800 1500

Total length 3000+Kms. Japan is providing financial and technical help for this project.

Benefits of Dedicated Freight Corridor?

  1. The existing rail network, runs on a combination of diesel + electrical trains.
  2. The Dedicated freight corridor will operate entirely on electric trains= less greenhouse gases.
  3. After Dedicated freight corridor, the passenger traffic and freight (goods) traffic will be separated = leading to faster speeds and efficiency.

HIGH SPEED RAIL CORRIDORS

  • Under the High Speed Railway corridors (HSR) plan, the Railways intend to run trains at the speed of 160 km to 200 km per hour.
  • Ministry of Railways has selected following six corridors
  1. Delhi-Chandigarh-Amritsar
  2. Pune-Mumbai-Ahmedabad
  3. Hyderabad-Dornakal-Vijaywada-Chennai
  4. Chennai-Bangalore-Coimbatore-Ernakulam
  5. Howrah-Haldia
  6. Delhi -Agra-Lucknow -Varanasi – Patna

Benefits

  1. A high-speed rail moving at speeds of 300 km/hr would take just about 2 hours to reach from New Delhi to Lucknow. Currently, it takes six hours for the fastest train on the route to cover the same distance.
  2. The benefits of high-speed rail are immense vis-a-vis road and airlines. These rail systems have 30% less land requirement in comparison to expressways for same carrying capacity.
  3. High-speed railways would directly compete with economy class tickets of an airline.
  4. These trains are highly fuel-efficient as their energy consumption is one third less than private cars and 5 times less than airplanes.

problem

  • Railways is more interested in constructing the Ahmedabad-Mumbai project first.
  • But Planning Commission recommends that Delhi-Agra corridor should be constructed first. Because it is shorter and cheaper than A’bad-Mumbai project.

National High Speed Rail Authority

  • Ministry of Railways has decided to set up a National High Speed Rail Authority (NHSRA)
  • It’ll be an autonomous body through a bill in Parliament .
  • NHSRA will be responsible for planning, implementation and monitoring of High Speed Rail Corridor projects.
  • NHSRA is being proposed to be set up on the lines of the National Highway Authority and it would be under the Railways Ministry.
  • selection of chairman and members of the NHSRA would be done by the Public Enterprise Selection Board (PESB) with the approval of Appointment Committee of Cabinet.

Rail Tariff Regulatory Authority

  • Railways Act, 1989, Ministry of Railways enjoys full powers to fix tariffs.
  • But Finance Ministry recommends that a separate body should be established to regulate tariff in Railways.
  • Currently, Telecome sector has TRAI to regulate the tarrifs.
  • Because Railways is a monopoly. therefore an independent regulatory mechanism =necessary.
  • This authority will help Railways to improve performance and tighten productivity loss.
  • And To ensure that the Railways meet the transport requirement at the minimum cost to economy.

Counter arguments: Rail Tariff Regulatory Authority

  • Road transport segment is entirely in the private sector and it doesn’t have any regulatory body to fix transport prices.
  • In Aviation sector, there are both private and public operators (Airindia!) and yet there is no regulatory authorities to control transport prices in Aviation either.
  • And both road transport and aviation =competitors of Railways.
  • So, if they don’t have a price regulator then why should Railways?
  • Besides, Ministry of Railways doubts such authority will not help fulfilling the social-objectives.(such as concessional passes for students, cheap tickets for poor people)
  • On these arguments, the Working Group of planning Commission has said, “maintain status-quo. No need to setup Railway Tariff regulatory authority.”

India vs China: Railway success

The Productivity of Chinese Railways= >More than twice of Indian Railways! Why? Because

China India
  1. They use heavier, longer and faster freight trains to transport coal, cement, iron-ore etc.
  • We don’t have the money to buy such trains.
  1. They’ve outsourced the minor tasks (such as cleaning the railway coaches, providing blankets to passengers etc.) to private companies =cheaper input cost and more efficiency.
  • Not done to annoy unions, vote bank.
  1. They closed down many railway stations with low volume of freight or passengers.
  • Not done.
  1. They don’t usually provide rail service for short distance passenger traffic. This is done to release staff and trains for longer distance rail travel.
  • Not done
  1. Their railways doesn’t waste ca$h on opening museums, cultural centers, hospitals etc.
  2. Whatever hospitals, schools etc. Chinese rail authorities were running in the past, they handed it over to local municipalities.
  • Prior to W.Bengal election, Ex-Railway minister Mamta Benerjee announced many such projects like Tagore museum, bottling plant, hospitals etc.
  • These projects may be socially desirable but economically they’re not viable.
  • Railways shouldn’t involve in these activities.
  1. Their wagon construction factories run on private-corporate level efficiency.
  • Our factories run like just “sarkaari” department= low productivity.
  • The ruling party would insist to setup new factories in the election constituency of their leader.=not good from production/ Management/economy point of view.
  1. China abolished the “regional-division” system and centralized the management of depots, stations and yards= more efficiency.
  • Our railways has “division”: western, southern….=empires within empire.

Suggested Reforms

Planning Commission formed a working group on Railways. It has recommended following things

Passenger trains

  • Restructure the tariff to maximize Revenue. (=increase ticket prices)
  • At present, speed of trains of Passenger Mail/Express trains is below 55 kmph.
  • These are low as per international standards.
  • On popular routes, 24/26 coaches trains should be run to generate additional capacity.
  • Replace conventional trains by EMUs/MEMUs/DMUs.
  • Railways should develop alternative terminal at sub-urban areas of major cities.
  • Railways should hasten the implementation of Dedicated Freight Corridor. This way passenger and freight traffic will become separate from eachother= faster passenger services, quicker freight movement.

Goods transport

  • Following the Chinese success story, our strategy should be “HEAVIER, LONGER, FASTER” trains for freight (goods) transport.
  • Upgrade to heavier (higher axle load), speedier (100 kmph) and longer freight trains=maximum utilization of existing track capacity.
  • We should Import bogies from USA. They’re more track-friendly and capable of carrying enhanced loads.

No subsidy on magazines

  • Indian Railways carry ‘Magazines’ parcel at highly subsidized rates.
  • But nowadays the cost of magazines is very high and it is a profitable business!
  • Besides, Magazines are not read by poor people.
  • Therefore, Railways should stop giving concessional rates for transporting ‘Magazines’.
  • However, Railways should continue giving concessional rates for transporting Newspapers.

Perishable cargo

Under Kisan vision project.

  • cold storage and temperature controlled perishable cargo centres
  • Refrigerated Vans (VPRs)
  • Through Public Private Partnership mode,
  • Project done in Singur, Nasik and Jalpaiguri etc.

Safety

  • There are almost 15000 unmanned level crossings. = They’re responsible for 40% accidents (2011 data.)
  • Accordingly, Indian Railways Vision – 2020 and Railway Budget Speech, these unmanned crossing have to be fixed in the next five years.
  • For Signaling & Telecommunication in Railways, switch over to systems and equipment of higher reliability and safety levels.
  • Setup On-Board Fire detection and Fire Fighting equipment in trains.
  • Use of GPS technology and RFID technology for tracking railway trains.

Biometric VCD

  • Driver’s Vigilance Telemetry Control System).
  • It is a small wrist-watch like device. It constantly moniters driver’s posture, pulse etc.
  • So if the driver has consumed desi-liquor and fell half-asleep in the cabin, the station manager would get alarmed and can automatically stop the train.
  • Russia has been using such telemetry system for Locopilots (=train drivers) since a long time.

Train Collision Avoidance systems (TCAS).

  • It is combination of GPS and Radio Frequency.
  • It applies brakes without pilots.
  • It avoid collisions due to human errors, rain or fog, natural calamities or sabotage.
  • This would minimize human dependence in train operations and enhance the level of safety

problem

  • Railway would need more than 16000 crores to do all these things. And Government of India is tight on cash already (MNREGA, food security etc..you get the picture)
  • So Railways will need to arrange the cash by itself = need to raise the tariffs, otherwise safety reforms can’t be done.

Misc. Cost reduction

  • LED based lighting & Display System to reduce electricity bill.
  • Provision of solar Panels, Solar Water heaters, Solar Pumps etc. in Hospitals, Running Rooms, Rest Houses run by railways.
  • Provision of roof top Solar Panels on passenger coaches running in Close Circuits
  • Grid connected Solar Panels at major stations.

Human resource Management

Recruitment

  • For the medium term, UPSC should provide railway officers.
  • But in the long term, railways itself should hire personnel from IIMs/IITs.
  • Railways should also allow for lateral recruitment in R&D, marketing and finance, HR.
Outsourcing
Minor works Major works
Examples cleaning of coaches,provision of blankets and food in trains manufacturing locomotives, coaches, wagons.
Suggestion of planning commission: Outsource this work private companies=less cost than permanent staff. Partial disinvestment. Run it on corporate lines.=more efficiency.
  • ^Both Chinese Railways and Japanese Railways are doing this.

Mock Questions

Q1. Correct statement about Dedicated Freight Corridors?

  1. It is made up of three sub-corridors: Western, Eastern and Northern
  2. The Eastern Corridor will connect Punjab to W.Bengal
  3. Only electrical trains will be operated on these corridors.
  4. The Western Corridor will connect Punjab to Karnataka.
  1. Only 1 and 4
  2. Only 1 and 3
  3. Only 2 and 3
  4. Only 2 and 4

Q2. Correct Statement about National High Speed Rail Authority

  1. It’ll be responsible for implementing the Dedicated Freight Corridor project
  2. It’ll be an autonomous body, established by an act of parliament.
  1. Only 1
  2. Only 2
  3. Both
  4. None
Q3. Which of the following states are common for both Eastern and Western Dedicated Freight Corridor projects?
  1. Rajsthan and Gujarat
  2. Delhi and Haryana
  3. Haryana and UP
  4. UP and Bihar

Descriptive

  1. National High Speed Rail Authority (5m)
  2. Train Collision Avoidance systems (TCAS) (5m)
  3. Examine the case for setting up a nation railway tariff authority (10m)
  4. Write a note on Dedicated Freight Corridors (12m)
  5. (Interview): Railways: The artery of India.

Interview

  1. (in context of the issue that Planning Commission says run high speed train on Delhi-Agra while Railways wants Ahmedabad-Mumbai)…which project should be taken up first and why?
  2. Should Government establish a separate regulatory authority to regulate transport price in highway and aviation sector? Yes/No why?
  3. You’re made the Railways minister. What will be your first five initiatives?
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41 Comments on “[Economy] Dedicated Freight Corridors (DFC), High Speed Rail Corridors, Rail Tariff Regulatory Authority, Issues, Reforms in Indian Railways”

  1. Mrunal, you are a savior. thank you so much. these articles save so much time especially at this point of time.

  2. thank you so much. these articles save so much time especially at this point of time.

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