Bibek Debroy’s Plan to turn-around the Indian Railways

The object in India for such a density of population should be to construct locomotive railways for trunk lines of communication, and horse railways for the short branches, says Bibek Debroy.

In India, with a population of 110 per square mile, we are now constructing trunk railways….

These trunk railways will no doubt pay good dividends, for although the population is only half as dense as in England, the cost of construction is small.

We have commenced well in India, and if the system of trunk lines be judiciously carried out, they must prove most remunerative, and will no doubt become valuable property to the shareholders; but a beginning has already been made to construct expensive branch lines….

The object in India for such a density of population should be to construct locomotive railways for trunk lines of communication, and horse railways for the short branches.”

Engines to haul trains along trunk routes and horses to haul trains along branch routes; the year was 1860 and this quote is from a monograph authored by Charles Burn on the construction of horse-railways. Even then, it was recognised that branch lines might not be remunerative.

In November 2014, the ministry of railways issued sectoral guidelines for domestic and foreign private investments in the railways, and this included renovation, operation and maintenance of stand-alone passenger corridors like branch lines and hill railways.

Indian Railways (IR) will transfer existing assets at nominal values, invite bids and grant concessions for 10-15 years.

One hundred per cent private equity is permitted. The rolling stock will be owned and maintained by IR and private operators will have to pay track access charges to IR. At least for branch lines (and hill railways), private operations are, therefore, already part of accepted government policy. But what are branch lines?

This is what the most recent (2013-14) Indian Railways Year Book states.

“Despite concerted efforts to enhance earnings on branch lines, most of these lines remain commercially unviable. The Railway Reforms Committee recommended closure of 40 such lines but due to stiff public resistance and opposition by state governments towards withdrawal of such services, only 15 lines have been closed permanently by the Railways. “

“A review of the financial results of the existing 90 uneconomic branch lines for the year 2013-14 shows that, on an original investment on these lines of the order of Rs 2,617 crore or Rs 26 billion, loss during the year 2013-14 amounted to Rs 1,681 crore or Rs 17 billion.”

Intuitively, branch lines are feeders. In 1862, the Indian Branch Railway Company was formed to construct branch and feeder lines.

There were also narrow gauge lines built by rulers of former princely states. These were never meant to be remunerative.

They pandered to the ego. After Independence, in 1969, there was a Railway Committee on uneconomic branch lines and we had some kind of definition of “branch line”.

Branch lines are narrow gauge lines and those broad and metre gauge lines that join the main network only at one end.

There was also a double kind of definition of an uneconomic or unremunerative branch line – (a) it did not make profits; (b) it did not make profits more than the rate of dividend paid to the Union government. Note that if there is gauge conversion and switch from narrow to broad gauge, the number of branch lines (and uneconomic lines) declines.

This doesn’t mean those lines have been closed.

The Railway Reforms Committee that recommended closure of 40 branch lines is one that goes back to 1983.

As far as I can make out, at the turn of the century, there were 110 uneconomic branch lines – 44 broad gauge, 44 metre gauge and 22 narrow gauge.

As the 2013-14 quote states, the number is now down to 90 (actually 89).

Is this because some lines have closed down, become remunerative, or because of gauge conversion? I don’t know and that is because of something quite bizarre.

IR continues to mechanically use the expression “branch line” and once upon a time, IR had classifications of routes as mainline, suburban and branch line.

But that classification was scrapped in 1976 and based on multiple criteria, broad gauge routes are now classified as A, B, C, D and E.

Metre gauge routes are classified as Q, R and S. A branch line can thus be interpreted as narrow gauge, metre gauge or D and E categories of broad gauge, and uneconomic branch lines will be sub-categories of these.

With IR accounts being the way they are, it is impossible to precisely know which line is remunerative and which is not. However, this is an interpretation.

Despite the expression “branch line” being bandied around and even used in policy announcements, there is no longer a definition, unless one adheres to the 1983 classification of lines.

In 1902, Lord Curzon went on a visit to the area around Lumding and had a conversation with the agent of the newly constructed railway line.

“Now, Mr Woods, that you have built this line, what traffic do you expect to carry?” “Nothing, sir.” “Then why build the line at all?” “I do not know,” was the reply. “The Government of India ordered it to be built, sir!”

That’s how many branch lines were built. With flexibility in fares and innovative marketing, many branch lines can be turned around, if they are taken outside IR. However, it helps to know what is being opened up.