Saturday, May 23, 2015

May 23 2015 : The Times of India (Pune)
`Cost of running train not quite known'

Only Aspect Considered Is If Rakes Are Available: Report
The interim report of the committee appointed for major railway projects reveals that commercial considerations are often overlooked while starting new trains, which is the reason for some long-distance trains like the Rajdhanis, Shatabdis and Durontos incurring losses on some routes. While the railways has 61 Rajdhani, 52 Shatabdi and 64 Duronto trains, the committee studied an “illustrative“ list of five Durontos, five Shatabdis and six Rajdhanis. The report shows that all five Duronto trains -one of which is between Pune and Hazrat Nizamuddin (New Delhi) -were running in losses. Two of the six Rajdhanis and one of the five Shatabdis were also in the red. The committee, which brought out the interim report, has been constituted by the railway ministry for the mobilization of resources for major railway projects and for restructuring the ministry and railway board. It is headed by economist Bibek Debroy.
While the railways gets several requests for new trains, decisions are not often based on commercial considerations, the report says. Requests for new trains and route extensions are scrutinized by a zonal time table committee and then by a national inter-railway time table committee (IRTTC). “Minutes of the IRTTC show there is rarely a scrutiny of the costs and benefits involved in the introduction of new trains,“ the report says. The interim report of the committee appointed for major railway projects says that while there is rarely a scrutiny of the costs and benefits involved in the introduction of new trains, there is also no consideration for what the new trains and route extensions mean in terms of disruption to existing traffic flow. The only aspect that is considered is whether rakes (coaches) and locomotives are available.
Former chairman and managing director of the Konkan Railway Corporation, Ketan Gokhale, said new trains are started in deference to the demands of ministers and MPs. “Some trains run full up to a particular station and empty thereafter. There may be a few Duronto trains which are making profits. This is because all Durontos are nonstop trains. Also, there are some trains that incur losses for a year, but later run to full capacity,“ he said.
The report says the cost of running a train is not quite known. “In the present costing system (for one train), all annual expenses are allocated to different services and the unit cost of running that train is then arrived at. The system does not help one know how much it costs to run a specific train. Hence, one also does not know how much profits a specific train brings in. This is true of both passenger and freight trains,“ the report says.
In a proper costing system, the cost aspects for a passenger train would include the money incurred on different types of coaches, power car, pantry and parcel van, depreciation and interest, terminal and line haul costs, and the costs incurred because of loss of path to goods trains, the report says. “Before any decision is taken to introduce a new train, or eliminate an existing one, this exercise (about cost of train and revenue earned) should be automatic and mandatory. Such an exercise can be done but the present system sees no reason for it,“ the report says.
Railway minister Suresh Prabhu did not respond to either phone calls or an SMS sent to him about the report.Incidentally, Prabhu had not announced any new train in his first railway budget this February. It was for the first time that a railway minister had departed from the practice of announcing a new train. “Due to overutilised line capacity and backlog in track renewals, there are speed restrictions which lead to a delay in running more trains. The review will be completed soon so that we can announce new trains and increased frequency in this session,“ Prabhu had said in his budget speech.


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