Fears Of Debt Trap Mounting

The ministry of railways has expressed serious fears of plunging into a debt trap unless the return on investments is more than the cost of market borrowings.

The `status paper on Indian railways: some issues and options' presented in Parliament yesterday by railway minister Nitish Kumar, lists a host of problems faced by the organisation, which include traffic flow imbalance, decline in market share, cross subsidisation of passenger with freight services, losses on account of suburban services and arrears of track renewals have been identified as some of the main areas of concern for the Indian railways.

It points out that the rail network suffers from inherent imbalance in traffic flows. The broad gauge network, which forms 63.3 per cent of the route km carries 95 per cent of the freight and 89 per cent of the passenger traffic. The golden quadrilateral connecting the four metropolitan cities of Mumbai, Delhi, Calcutta and Chennai and the two diagonals comprise 25 per cent of the total broad gauge route km (or 15.8 per cent of total network) but carries in excess of 56 of the total freight transport output and 47 per cent of passenger traffic.

Further, despite the fact that the railways are more economical and energy efficient than the roadways, there has been a dramatic shift in passenger traffic from rail to roads. In fact, while in 1950-51, the railways carried 80 per cent of the traffic and the roads only 20 per cent, this has altogether reversed in 1996-97.

Cross subsidisation is another serious problem faced by the rail network. Whereas the effort put in for carriage of passenger traffic vis-a-vis freight in terms of number of trains run was in the proportion of 60:40, the revenue contribution was 28:72. In financial terms, this amounted to Rs 2,800 crore during 1997-98.

Within the passenger stream, there is an important category of suburban passengers around the metropolitan areas of Mumbai, Calcutta and Chennai, which account for about 60 per cent of the total number of passengers on the railways. These suburban services suffer a loss of about Rs 217 crore per year due to highly concessional monthly season tickets.

Track renewals arrears is another area of concern. Renewal arrears, which were 9595 km at the beginning of the Eighth Plan, have grown to 10,957 km in the beginning of the Ninth Plan.

There is also a shortage of passenger services due to the overriding priority has to be provided to freight traffic. The inevitable consequence of non-provision of the requisite number of coaches has led to a drawing down of the maintenance and traffic spares which, in turn, has resulted in unreliability of the assets as well as running of passenger trains with lesser number of coaches.