Rlys may diversify freight basket

The move aims to tap into 17 additional commodities including sugar, milk, agricultural products and laterite

Aiming to diversify its kitty of freight commodities, Indian Railways is considering tapping into 17 additional commodities such as sugar, milk, agricultural products and laterite.

This comes at a time when the market share of the Railways in freight transportation has dropped to 33 per cent from about 90 per cent in the 1950s. Indian Railways has often been criticised for excessive reliance on transporting five bulk commodities for revenue generation and persistently losing traffic to roads.

Currently, coal, iron ore, steel, cement and fertilisers account for about 95 per cent of Indian Railways’ overall freight traffic.

It is expected the coming Railway Budget might announce the procurement of high-capacity wagons to increase loading capacity. Milk wagons that will enhance loading capacity from the existing 40,000 litres a wagon to 45,000 litres might be proposed. “Milk production in the country has risen; also, we have lost a lot of long-distance traffic related to agri products and sugar. Now, we are looking to tap into these commodities,” said a senior Railways official, on condition of anonymity.

Experts have welcomed the move, saying this is crucial to meeting Budget targets, which cannot be solely achieved through reliance on bulk commodities. “We have one of the highest freight rates in the world. Indian Railways has to diversify its freight basket to increase this business without steep rate rises,” said Akhileshwar Sahay, an expert on Railways.

Also on the government’s priority list is setting up a logistics corporation, in partnership with private entities. This is aimed at catering to door-to-door commodity transport, through a mix of road and railway transport.

The interim Railway Budget for this financial year had announced a policy to reduce the unit cost in freight operations. It laid emphasis on improving the Railways' market share in this segment through a mix of strategies. These included reducing wagon turnaround time through improved operations and maintenance practices. Other initiatives included raising freight train speed by upgrading rolling stock, increasing the length of trains, introducing an incentives regime that encouraged a shift of traffic to rail and minimising empty-running.

Senior Railways officials say the movement of empty wagons should be cashed upon, as there is substantial scope to increase load capacity. Also, enhancing efficiency could lead to monetary gains. A recent report by the Comptroller and Auditor General had said Indian Railways had incurred a loss of Rs 423 crore due to failure to remove bottlenecks on short routes. Owing to inefficient locomotive services and management, the Railways lost Rs 733 crore, the report added.

The thrust on increasing efficiency was reflected in the performance in 2013-14, when the Railways surpassed its freight loading targets, the first time in five years. Against the revised Budget target for 1,052 million tonnes (mt), it carried 1,053 mt in 2013-14. For this financial year, the Railways had set a loading target of 1,101 mt in interim Railway Budget 2014-15, up 4.5 per cent compared to the previous financial year, but lower than the projection in the 12th five-year Plan (1,206 mt for 2014-15).