Wagon shortage adds to railways’ woes

The Indian Railways is headed for yet another year of dismal performance, not because the rate of economic growth, and, revenue earnings from freight traffic have slowed down, but because it doesn’t have enough wagons to carry the traffic the market would be happy to offer.

With fewer wagons than required at its disposal, to achieve the tonnage target, the railways will have to book traffic for shorter leads (distance travelled) which would adversely affect its earnings. Over the time, this would translate into reduced resources for growth.

The wagon shortage, which already afflicts the covered-wagon section, and, soon likely to be a cause of concern for open wagons freight, is the result of no orders having been placed for covered wagons for almost two years now, and a flawed and delayed placing of orders eight months ago, for open wagons. The Ministry of Railways was in the hands of the Trinamool Congress until it quit the ruling United Progressive Alliance ( UPA) government at the Centre less than three two months ago.
The inability to place orders for wagons on time and in the right manner has affected economic activity in West Bengal, where a large number of wagon manufacturing units are located. This is in sharp contrast to the alacrity with which Manata Banerjee, the Trinamool leader, had announced new railway projects for her home state.

“She is good in announcing high-profile projects,” says a former senior railway official who has worked closely with her for several years and prefers to remain unnamed, “but not good in running an administration which involves tackling the nitty-gritty of approving public-sector tenders which are often contested.”

In the first half of the current financial year (April-September), the railways improved its freight earnings over the corresponding period a year ago by an impressive 25 per cent which can be attributed to its raising the freight rates in February. But even then profitability is bound to be hit as lead (the average distance travelled by consignments) has decreased and net tonne km (the real measure of the freight earned) is up only 1.3 per cent.

Interestingly, the rise in tonnage carried in the first half is entirely accounted for by items like coal, iron ore and raw materials for steel plants and steel products. Tonnage for these, transported in open wagons, has gone up by 8.6 per cent, whereas the same for items carried by covered wagons (foodgrains, fertilisers, cement and everything in containers) has fallen by 1.2 per cent. In several railway zones, there simply aren’t enough covered wagons which could have been filled by readily available freight, say sources familiar with the organisation.

The availability of open wagons, currently better but unlikely to remain so, tells a more complex story. In line with the current policy, for the latest round of wagon orders on manufacturers, 50 per cent were released about eight months ago in the first go with the provision that the rest would be released on satisfactory supply of both this order and unfulfilled parts of earlier orders.

But several manufacturers, who had done so, were in for a rude shock when the balance 50 per cent of the order was released. Not all the eight manufacturers which had received the first tranche, but only three received the balance order, leaving the other five empty handed.

The reason behind this could be traced to an unit in Rajasthan, closed for 14 years and sought to be revived by its new owners, has gone to the court pleading it be treated not as a new manufacturer which has to be first given experimental orders, but an up and running one. When the railways released the balance order, they took the view that the orders to the five be held back as the matter was sub-judice. This is despite the fact that four of the five denied the remaining orders have nothing to do with the court case and enjoy the same status as the three which have already received the second tranche order. Interestingly, one of the three which have received the balance orders and the fourth, which has gone to court, are controlled by the same entity.

In the first half of the year, the railways had met a marginally lower percentage of the total freight target for the current year than it did in the previous corresponding half year.

Hence, to meet the higher target for the whole year, in the second half (the busy season) the railways will have to carry 24 per cent more tonnage than in the first half with the same available rolling stock.

This can well lead to a shortage in covered wagons also.

http://www.business-standard.com/india/news/wagon-shortage-adds-to-railways-woes/494260/

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Published in: on December 2, 2012 at 9:58 am  Comments (1)  
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One CommentLeave a comment

  1. in future there will be shortage for everything in railways. now we have started to feel it only. the public now has the view that railways gives free of cost all the things once they on the plat form. every ST holder must become aware of the fact that they travel almost free of cost.


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