Improving India Part-2: On improving the state of Indian Railways

This is my second article on Improving India series.

Recently, there has been some talks over the privatization of Indian Railways to bring in efficiency and better customer service. On my Quora profile, I have answered multiple questions to this account. In this article, I am going to use some content from there as well as add my own thoughts on what changes that Indian Railways must undergo to transform itself.

Vande Bharat Express. Image Source- Google

Presence of Coastline impacts performance of Railways

When the British introduced Railways to India, their purpose was not to ferry passengers from one end of the country to another. It was to transport the raw materials [cotton, crops, gold] from the hinterland to the coastal cities of Bombay and Madras from where they can be shipped to England.

Indian government later continued to follow the same model after Independence. With the Freight equalization policy introduced by Nehru, this further increased the economic importance of coastal cities at the cost of inner cities. Historically, the performance of Railways in a location has a strong positive correlation with the presence of coast. Especially in the freight segment where cargo has to be shipped to and from the country to outside, coastal cities with a good railway connectivity to the rest of the country becomes centres of economic activity. This is how Bombay and Madras developed into mega cities.

So who gets to lose in this game?. The hinterland which produces the crops and gold. They have no ports, hence no economic importance. Ironically — in a way- the presence of Railways in those states contributes to their poor economic output. The local government sees no incentive to make their Railways any better. Thats why the Railway network in the South and West parts of India is better organized than the North and East.

We develop the inner cities and towns in the hinterland into educational and economic hubs, the Railways in those cities would also receive investments

Why is Indian Railways so poorly managed?

This question is often repeated one. I have traveled a lot in Indian trains. I have also traveled a lot in Indian buses and flights, and the problems that plague the Railways- delays, accidents, poor service, cleanliness- exist in all pan India modes of transport as well.

The problems of Indian Railways is because its connects a country of continent sized proportions by operating as a single unit. Naturally there are bound to be problems. Imagine you leading an all India team in a mega telecom project in a corporate office. You would be facing the same problems the Railways are facing now- lack of coordination, delays in execution, poor quality deliverable. The bigger and wider the team, the more the problems.

So will privatizing Railways solve the problem of poor service?

Privatization is not a magic pill that can bring in efficiency in one stroke. I say this- despite being an advocate of free market capitalism myself.
But before going further, lets look at the complexity involved in Railways

Railway Network map-India

The most important reason for [not privatizing] is its sheer size and market. No other organization in this world [public and private] is spread over such a large area, covering more than 130 Crore people and employing over a million people. No private sector company [not just India], would want to take over such a huge behemoth and run it successfully even for a year without government support.

According to the Railways Year Book 2018–19, Indian Railways ferried nearly 844 Crore people and over 100 Crore tonnes of freight in 2018–19 alone. It runs more than 14,000 trains every day and operates over 8000 stations across the country. This is in the passenger segment alone. In the freight segment there are about 9000 trains run daily. As of March 2019- IR rolled out more than 75000 passenger coaches and 288,000 freight wagons. It employs over 1.3 million employees

Source for all the above numbers- https://www.indianrailways.gov.in/railwayboard/uploads/directorate/stat_econ/Year_Book/Year%20Book%202018-19-English.pdf.

Now, just think for a moment and tell me which transportation and supply chain company in the world has ever come close to handling such a big load and run in profit?.

Apart from the sheer market size, following are some of the reasons why privatization looks a bad idea:

1. Historically no private company in the world has had a success story of running passenger Railways system in a large country. The Amtrek of USA is really a failed model and even for Americans, it cannot be used as a model of a perfect case of private player running a rail-road system
2. Railways is a social service. It involves transporting people. Just like your local MTC buses. If Railways were given to private players, the least profitable routes- especially those connecting the backward areas and districts would be cut off

So how do we go about bringing in improvements?.

A few thoughts from my side are

1. Privatize the side systems- like catering, ticketing, amenities- which are crucial in bringing in efficiency in customer service.
2. Build multi modal transport systems- The switch from train to Metro to share auto must happen seamlessly. When I got down at Kochi station last year, I had to walk nearly a mile before reaching the nearest metro station with all my luggage bearing me down. A weary, hungry tourist should feel welcome when he visits a new place.
3. WiFi connectivity and information kiosks- The former is in place atleast in major premium trains. However, a new traveller should know have the information on the best hotels to stay, best tourist spots to visit, local weather report and other tourism related information — pinged to his smartphone when he arrives at a station. This would save a lot of time and money , and also save from making the wrong choices [and regret later].
4. Fast trains on major profitable routes- It makes no sense to have a ‘Mail train’ that runs between Chennai and Bangalore for nearly 7 hours — covering a distance of only 300 kms. Convert all those slow passenger trains to Duronto/ Shatabdi / Gatimaan.
5. Incentives for repeat travelers- There are many people who travel between cities for business/ commercial reasons. Based on a person’s travel history [data can be collected from Aadhar Card/ mobile number details when he books ticket], a discount in ticket price can be offered

These are just starting points. There are millions of things we can do as system designers to bring in changes. The goal should be to ensure smooth traveler experience and thus ensure there is no scope for any corruption/ rule breaking