Also Read   Related Stories News Now - Railway Budget pulls market 255 pts ahead - Mamata plans grand schemes on a shaky track - India Inc praises Mamata budget - Projects get big boost - Sum gains for five rail cos - Computerisation spending increased by 46 per cent   Also Read   Related Stories News Now - Hat-trick of gains - China offers Africa more trade, investment - 100 & counting: Swine flu-hit Pune gears up for winter - Karnataka CM says crisis has been resolved - Sri Lanka accelerating return of displaced: UN More

If you want to understand what has been happening to the railways, forget Mamata Banerjee’s railway budget, and look at some long-term trends. The length of the routes on which the railways carry goods and people has remained virtually unchanged since 1980; indeed, the carrying capacity of all railway wagons has come down since then by about 10 per cent; the number of locomotives has come down by 25 per cent; and the number of railway employees has dropped 10 per cent. If the system has grown nevertheless (freight traffic has trebled and passenger traffic quadrupled), it is because broad gauge has replaced almost all the metre and narrow gauge lines, and double lines have replaced many single lines (so that traffic can move in both directions, without one coming in the way of the other). Also, bigger wagons have replaced smaller ones, there has been a switch from steam and diesel locomotives to diesel and electric engines with superior traction, and journey length for passengers has increased dramatically. But while there has been some improvement in signaling systems, the average speed of freight movement has managed to inch up to just 23 km per hour. The pattern of traffic has changed very little too; seven high-bulk, low-value commodities (like coal and iron ore, foodgrain and cement) account for more than 90 per cent of all railway freight.

Growth achieved by running the same or fewer, but heavier, trains carrying bulk goods has its limits, if the average speeds cannot be increased dramatically. And all the announcements of izzat tickets, janata meals, yuva trains, adarsh stations and duranto services will not change the picture. At some stage, the railways (with annual investment now of Rs 40,000 crore, and total capital stock of close to Rs 200,000 crore) have to transform themselves into a more modern transport system; it is this transformation which the railways have failed to achieve. Containerisation with door-to-door service, which would dramatically expand the range of goods carried, has made slow progress. The new freight corridors were supposed to be transformational, but many years after they were first mooted no one has any idea of cost and time schedule, or indeed viability. Fast inter-city trains would be transformational, but are ruled out when the system cannot increase average speeds; indeed, the “super-fast” trains of three decades ago run slower now than they did then. Changing the travel experience would be transformational, and bring people back from energy-inefficient airlines, but even the project to make a multi-functional showpiece of the New Delhi station has failed to make headway.

It does not help that the system’s finances are on a slippery slope. The net revenue, post dividend, has dropped by a stunning 80 per cent in two years, from Rs 13,431 crore in 2007-08 to the Rs 2,642 crore projected for the current year. That drop is explained entirely by the Pay Commission, which over these two years will have cost an additional Rs 28,000 crore. Even without the Commission, employee costs have been by far the fastest growing of all costs in the railways. If staff costs are not pared, and the galloping pension bill brought under control, the railways run the danger of ceasing to generate any net surplus.

You wouldn’t guess most of this from Ms Banerjee’s 38-page peroration, although she did mention that the optic fibre project that she had highlighted in her railway budget eight years ago has made no headway. Part of the problem is an archaic financial system that does not even calculate depreciation properly. What the railways need most of all is management transfusion, and that can only come through corporatisation. Any chance of that happening? Of course not.

Tags : Mamata Banerjee | railway budget | railway freight |   Read Business news in  Advertisements   Your dream home can now be a reality.   Visit Fortis for a preventive health check-up & get a 20% discount.   Follow the ups and downs of your investments. Try our new Portfolio Tracker   Kolkata Dock \ Freight contract for the British Gurkhas Nepal   Find how Midsize Businesses use ERP to gain competitive advantage   Trading in Forex is now as easy as 1-2-3   Discover an economical and cost effective way to market your products and services   Giftwithlove.com: Same day delivery of Flowers and Cakes to India   Download the E-book on the Future of Business Intelligence   Learn Best Practices for improving customer satisfaction   Know your customers better... download the free e-book on CRM