HIGH SPEED RAILWAYS

HIGH SPEED RAILWAYS

(Uday Shankar Jha)

Serious doubt on the efficacy of Railways to cater the need of passenger’s services is looming large and demand for urgent attention for policy planner and greater public.  High speed railways could be a survival   mechanism in passenger services in modern era when airways is giving tough competition and improved prosperity has increased expectations from the passengers.  Although Railway is considered to be more environment friendly and energy efficient in absence of high speed railways passenger traffic was gradually moving out and preferring airways particularly in medium and long distance segment in developed countries.  Even in developing countries like China,  India, Brazil, Russia etc. with growing prosperity more people are searching out some alternative for existing slow speed railways which is not only time consuming to travel but also very difficult to get a confirm reserved seat to different locations.  This article would evaluate the economics of high speed railways, its viability in developing countries, prevailing problems and emerging solutions world vide and would try to evaluate emerging trajectory in near future.

A high speed rail service, if implemented properly can give competitive advantage over existing fastest means of transportation-Airlines for journey around 1000 kms or above which was traditionally being catered by overnight train journey.  This sector was gradually whisking away to the air transportation which was carrying passenger in less than two hour.  Similarly, intercity traffic in the range of 250 kms to 500 kms was moving out in favour of roadways in absence of appropriate high speed railways.  With the help of high speed railways these passengers can be brought back to the railways.  However, the financial and economic viability of high speed rail view of demographic and economic condition are limited as it depends on enough people being able to pay a premium price to use them.  In absence of sufficient number of affluent people there could not be many users to use this service.  In such situation the policy planner has to target less affluent people or middle and lower income people to attract them to high speed rail by offering them some innovative scheme for longer period of time.

As per World Bank Report (2010 pp2), high speed rail line has dual advantage.  At one hand it provides valuable travel time savings to users.  On the other had it free up the capacity on existing line which gives them opportunity to use the line capacity for other transport user partially for freight services yielding higher revenue for the railways.  Despite using high energy high speed rail can earn carbon credit if it is able to win away air travel passengers to its fold.  High speed rail can bring a series of prosperity and higher industrial development in the entire area due to better connectivity leading to higher real estate price and increase in industrial production.

Definition of High Speed Train

Globally those trains which are traveling at the maximum speed of 250 kms per hour or more are defined as high speed train.  Such trains are being run on dedicated high speed lines.  This service reduces travel time substantially and improves service level in big terms.  Many a time these services provide end connection and direct route availability.  Japan was the pioneer with its Shinkansen trains followed by France with TGV & Germany with Maglev trains.  Subsequently Spain, UK, Italy, Belgium, Netherland, Taiwan & China have also developed high speed trains. China was one for the late entrants but it has developed a big scheme to cover many parts of the country and they have also successfully tested high speed train for more than 450 Kms per hour for commercial use. In the end of 2012 global length of high speed line is estimated nearly 13000 Kms.

Development of high speed train

Japan

The transportation need of 1964 Tokyo Olympics led to the development of first commercial high speed train in Japan.  The train services started in Japan in 1950.  There was conventional freight and passenger mixed use all over Japan and due to higher population and rail use many lines became heavily congested.  To meet the Olympic related transport requirements additional capacity was needed. At that time Japan decided to construct a separate 550 Kms long passenger dedicated, electrified high speed line on a new alignment with the help of World Bank. The construction work started in the year 1959.  Its service was opened well before 1964 Tokyo Olympics. This Tokiado Shinkansen popularly known as bullet train brought about quantum improvement by substantial reduction in travel time and offered much higher frequency of services between Tokyo and Osaka from 04 each day to an hourly services and ultimately to three trains per hour. This experiment was a financial success.  Within three years, its revenue exceeded operating cost including interest and depreciation. Subsequently Japanese government set out a blue print for high speed network of approximately 7000 route Kms. The average commercial speed of Tokyo – Osaka service is 200Km per hour with four intermediate halts.

Europe

Subsequently in France SNCF (French National Railway) adopted Japanese model by building a dedicated line on new alignment with electric traction in 1967.  British Railways introduced passenger services capable of operating at over 200 Km per hour from London to Bristol in 1976. In 1981 service between Paris and Lyon was started.  Between 1985 and 2007 services between France and Switzerland, Belgium and Holland & France and Germany were started with high speed network of 1700 route Kms. In 2010, high speed route Kms was 5500 spanning in countries like Spain, Germany, Belgium and Netherland (World Bank 2010 pp4-5). Thus, France was third country to have high speed railways in  1967.

Asia

After the experience of Japanese and Europe HSR train next step was taken by Taiwan, China & Korea.  The Korean line between Seoul & Busen was opened in 2004 up to Daegu and completed in 2010.  The high speed railway between Taipei and Kaohsiung was opened in 2007.  The most phenomenal growth of high speed railways has been seen by Chinese Railways.

China

Massive economic development in China increased the demand of infrastructural facility particularly the railway transportation both in freight and passenger transportation manifold. During 1990's railways in China was proving to be major bottleneck in the development of nations. Hence a deliberate attempt was made to discourage short distance travel in freight and passenger traffic. Due to this the average distance travelled by passengers doubled from 275 km in 1990 to 534 in 2008. Even the maximum speed of conventional trains was increased from 100kmph to 160 Kmph on around 13000 km of passenger routes.

The real thrust of high speed railway came with creation of Guangshen Railway company as a subsidiary of the Guangdeng Regional Rail Administration. Its first milestone was  opening of a trial section of about 60kms of high speed live in 2003 between Quinhuangdo and Shenyang. This was used to test various types of track design and EMU alternatives for even further trains. In 2004, the company introduced first train at a maximum speed of 200 Kmph between Guangzhou and Shenzhen. Following its success express electric multiple unit trains of 200kmph was introduced on 16,500 km of track. In 2007 on over 6000km of mixed use routes 140 train pair per day was launched. These were operating at a top speed of 200 to 250 kmph and were having commercial speed of over 150 Kmph by 2008 between Guangzhen and Shenzhen.  80 trains were operating at an interval of every 15 minutes. Its coaches were different from the conventional coaches, i.e. EMU coaches. These have two classes.  First class accommodation has 2 by 2 reclining seats. On the other hand second class has 2 by 3 seats combination. The price of these services was higher than the normal express trains. These services proved to be immensely popular as the general ambience and riding qualities of this trains were world class. To gain at least some return on investment the price charged on this services were higher than normal express trains. The high popularity of these trains indicated that general public of ready to pay higher service cost if these are catered in proper manner. All round advancement and evolution of in the standards and management of various railway subsystem like signalling trains, reception and dispatch, train control system, telecommunication, electrical tractions, motive power, rolling stock, track structure and track formation and train operation led to progressive enhancement to speed and performance. The growing technical competencies in all these areas further boosted the progress of high speed rail.

One unique bold decision on the part of Ministry of Chinese railway to separate rolling stock manufacturing units from its own fold in year 2000 went in a long way to speed up the process.  This facilitated international manufacturers in joint ventures with Chinese counterparts to participate in the bidding of coach procurement.  This provided Chinese rail access to modern traction technology over a relatively short period of time.  Due to this modern manufacturing plants and know-how transfer in the design and manufacturing of modern train sets became easy to increase competition.  Deliberately two or more joint ventures were established for each product to encourage multiple suppliers to prepare and compete for future high speed train business.  Ministry of Chinese railway has declared long term plan up to 2020 for high speed railway procurement of a relatively large volumes of EMUs.  Initially four major international manufactures – Bombardier, Kawasaki, Hitachi and Alstom - established joint venture with Chinese counterparts and all these were awarded contracts for 200 EMU train sets each for 250 Kmph and 350 Kmph. 

Separation of Passenger and Freight Services

Chinese government also decided for separating passenger and freight services on all congested main routes and to developed fast intercity regional passenger networks in densely populated areas.  Unlike Indian Railway which has decided to develop dedicated freight corridor the Chinese Railway decided to construct high speed passenger dedicated lines on which services are fit to operate at top speed between 250 and 350 Kmph.  In China the plan was made for four North-South and four East -West corridors.  The total length planned by the end of 2020 was for approximately by 16000 kms. at the speed of 350 kmph.  Whereas, another 20000 kms were planned for mixed traffic high speed lines with a target speed of 200 to 250 kmph.  China has planned that all provincial level capitals and cities having more than 5 lakh residents are served by high speed railways.  This will cater to the need of 90% of population of China.

New EMU Coaches  

Unlike traditional railway coaches Chinese government has decided for a set of eight car train with High speed AC drive EMUs, with high strength aluminium alloy body shells weighing 8.5 tons.  China has decided for four main EMU depots at Beijing, Shanghai, Wuhan and Guangzhou.  China was planning to procure about 1000 EMU train sets latest by 2015 to cater the growing demand.  Help of several foreign firms have been obtained to manufacture high speed trains.  Bombardier – Sifang is a joint venture company between Canadian and Chinese manufactures.  Kawasaki heavy Industries of Japan has also licensed a Chinese firm to manufacture with transfer of technology and knowhow, Simens, Alstom General Electric, Hitachi and other prominent rail coach manufacturers have also secured business.  By the end of 2012 more than 10,000 kms have been opened for high speed rails of 350 Kmph or more commercial speed has already been started.  Such services are helping not only to its passenger, but also the freight traffic is reaping its benefit as additional capacity has become available on tradition rail routes.  This has given a major boost to freight traffic.  Even now the Chinese intercity has got better connectivity increasing its economic competitiveness.

Service Performance Evaluation

Since high speed trains are running at a commercial speed of 200 kmph or more upto 350 kmph or even more, these have provided a quantum jump in service level and substantial reduction in travel time.  Initially such services are started with eight EMU coaches and at an interval of one hour.  However, if there is more demand, then number of coaches and frequency can be increased upto sixteen coaches and frequency can be increased upto five services in one hour as in Japan in Tokaido Shinkansen line where 119 pairs per day are plying. However, if number of services increases then associated passenger amenities items has to increase to match peak hour demands including improved accessibility by road or metro rail, ticketing and separating arriving and departing passengers and comfortable waiting areas and other related services. If these facilities are provided properly, then reduction of travel time becomes a greatest attraction to the public. They mentally become prepared to pay much high price in comparison to traditional rail services.  Overall, even there is tremendous boost in demand and many air travellers get attracted to it for its comparative convenience, reliability punctuality and flexibility of services. On punctuality front, high speed trains are more reliable.  It is much higher in those countries where dedicated high speed passenger lines have been constructed.  These services in Japan are at the top where average delay on the Tokaido line is of only 10 seconds.  On safety front also Japan is top performer where no death has occurred from the start of service for last 40 years.  Even in country like France, Germany etc.  it is much better particularly in comparison to road and air travel.  High speed of rail helps in keeping operating and maintenance cost much lower than the capital cost.  Speed also delivers better equipment’s and train crew turn round times.  Working ratio i.e. operating cost (excluding depreciation) to revenue of 40 percent and operating ratio i.e. operating cost (including depreciation) to revenue of 55 percent was achieved by Japanese railways.  Even TGV Sudoest  Est line in France has been able to maintain 40 percent and 60 percent respectively. 

High Speed Railway in India :

HSR in India at present is only at discussion level. Although it started appearing in the Indian Railways (IR)   wish list since 2005.  In absence of proper financing mechanism, it is still in pre-feasibility study mode. Initially Mumbai – Ahmedabad section was identified, as here density of intercity traffic was one of the highest and the paying capacity is much better than any other part of the country. However, not much progress has been there even after the lapse of almost seven years. In the meantime, one Japanese consortium – under the leadership of METI (Ministry of Economy, Trade & Industry) Japan with association of Mitsubishi, Kawasaki, Hitachi Research Institute -  has also moved a proposal to run Semi High Speed Rail (SHSR) in the Mumbai – Delhi section. Here, they have proposed to run train at commercial speed of 150 Kmph whereas the present maximum speed has been something around 87 Kmph. This is proposed to be achieved by improving existing railway line. This would entail improvement in railway points and crossing, signalling, track and bridges.

On the other hand, the IR has also selected a Japanese consortium to undertake feasibility study for running the train at 300 Kmph on the 869 Km long Chennai- Bangalore – Thiruvananthpuram   section. Five different sections have also been studied by different agencies to run the bullet trains. Systra Fran , France has studied Pune – Mumbai – Ahmedabad  (650 Kms)  section. UK based consultant – Mott McDonald has been engaged to conduct the pre-feasibility study of the longest Delhi – Agra – Lucknow – Varanasi -  Patna (991 Kms) section. Spanish consultant Eneco  has been entrusted the task of studying shortest Howrah – Haldia (130 Kms) section. Delhi – Chandigarh – Amritsar (450 Kms) is another identified section. A separate National High Speed Rail Aauthority  on the pattern of the National Highway Authority was also on the cards (The Free Press Journal, Feb 2012).  In the meantime, the Chief Minister of Maharashtra has also proposed for high speed railway between Mumbai – Nagpur (738 Kms) section at a cost of `. 1.3 lakh crore at a speed between 300 – 350 Kmph (The DNA, July, 2012). As per one estimate, the construction cost of one Km would be `.100 crore which is around 10 to 16 times higher than the conventional rate of IR.  At this level of investment ridership revenue at best would be able to cover only operating cost.  In such a situation, the state government, the sovereign bank, Planning Commission and other Financial institutions have to play a pro-active role if at all this is going to happen in India. 

Precondition for High Speed Rail

If the economy of any nation is having strong undercurrent of higher growth and existing road and rail network is congested, specially the Trunk route, then high speed rail provides an opportunity for faster development by contributing to economy in several manner.  The released capacity due to construction of high speed rail provides an opportunity for the existing rail network to cater to the freight services which otherwise could not have been provided and economy had to ultimately suffer on this account. Further, high speed rail in passenger service provides an opportunity to passenger services in a faster manner, making people’s labour more productive.  In any case, the congested network requires expansion in capacity and construction of high speed network to cater to services in speedier manner. However, this benefit is or will be achieved if the distance between two cities is more than 500 – 700  Km apart, because for lesser distance, people will always prefer road journey, particularly for distance less than 100 kms. Further, the recovery of high investment would be possible only when higher number of services are plied between such cities, at least 20 or more pairs in each direction. Such network can only sustain when the existing market has sufficient purchasing power including premium high speed services at a much higher cost. If any economy has very limited middle or higher class, high speed rail network cannot sustain. In such a situation, countries particularly BRIC countries like Brazil, Russia, India, China, and other fast developing countries including Malaysia, Taiwan and  Thailand provide a conducive situation for the development  of fast passenger rail network.

Coming back to India in this perspective, we can say the construction of Dedicated Freight Corridor is not with the above economic criteria. Indian Railways should have constructed Dedicated High Speed Passenger network and the released capacity of existing network should have been utilized for the freight traffic.

Last but not the least, any service of high speed rail system can ultimately sustain only when entire system is operationally robust. There should be higher number of services which will also maintain punctuality and safety over the ambience (World Bank 2010 – pp20).  Meeting the challenge is a complex task. This requires seamless interaction of diverse technology in the area of foundation, bridges, tunnels, track, power system, communication, signalling, train set, train management, train safety, ticketing, passenger amenities, and systematic passenger/crows movement. At present, at global scale none of the underdeveloped or developing countries is able to fulfil all these conditions.

Hence, we notice that barring few developed countries , there is hardly any high speed network. Some of the countries among these can aspire and meticulously plan for and implement high speed rail network, at least in those areas where there is high passenger movement. Since rate of returns is going to be much less in comparison to heavy investment, such projects need a long term commitment of public budgetary contribution along with commitment and discipline to implement such a gigantic infrastructure project.

Bibliography :

The World Bank Report 2010 – High Speed Rail.

Feasibility Study of Semi-High Speed Rail Development in India, July, 2011(Outline), METI, Japan

Indian and Chinese Railways

                                                                                            

Indian and Chinese Railways

Uday Shankar Jha, IRTS, Sr.DSO/RJT

Two important emerging economies of the BRICS (Brazil, Russia, India, China and South Africa) countries probably indicate how the infrastructural development can be given priority to achieve high economic growth. This should be not only sustainable but also provide much robust economic enabling environment to provide sound base to industry and trade to grow further and compete worldwide. Up to 1990s India’s railway infrastructure was much ahead of those in China in terms of total route km, route km/square km and route km/head of population and many other parameters. India started its first train in April 1953 between Boribandar and Thane for a distance of 33 km. China started its first train for a stretch of 24 km. between Shanghai and Woosang in 1876. By 1945 China had only 27,000 km of rail track where as in India in 1947 there was 53,596-route km of track.  In 1950 Indian Railways carried 44 billion freight tons km against 39 billion of Chinese Railways. The Chinese Railways trailed Indian Railways technologically until 1980.  In fact, even in 1990 its 24,800 km are network with an annual density of 30 million gross tones has largely 50 kg/m and 43 kg/m rails, as many as 55 % of the wagons were with plain bearing. Until 1980, steam locomotives continued to remain its main power source, carrying 76% of its traffic. (Business Standard 2010: pp1).

In such situation the Railway in China was proving to be main bottleneck leading to a major problem of congestion. Lack of transportation facility was proving to be major stumbling block. Hence it caught the attention of policy planner of China.  They realized that until unless proper facility for transportation is provided, which is a part of overall logistic management, it would not be possible to achiever higher rate of economic growth. After suffering the transport constraints impinging on its economic growth for about two decades, since the start of the economic reform and liberalization in 1978, China decided in the early 1990s to the address the problem head on. (World Bank2005:pp2). An attempt was made to build capacity not merely to alleviate the most serious immediate bottleneck on its existing, largely outmoded transport infrastructure but to look beyond and build a high capacity system of modern railways that would provide for future growth and their needs.  This facilitated the path for sustainable future growth for the rapidly growing coastal provinces and extends improved economic opportunity to vast populations residing in the distant impoverished hinterlands. Rapid capacity expansion of railways has contributed significantly to the high economic growth in China. It could have hardly sustained its rapid growth without addressing the serious constraints in its transport system.  Relatively autocratic system, where one partly rules over the country and where dissent is generally not permitted, has probably facilitated this transition easily.

Modus Operandi - Institutional Factor

Although China’s national railways were still part of the government, it placed increasing emphasis on commercial focus and financial performance.  In contrast Indian Railways (IR) could never achieve this.  Although it was proclaimed that the IR should adopt commercial orientation it was more a lip service than imbibed policy. When one Railway Minister tried to move the IR on commercial principle, it costs his job.  On the other hand the Chinese Railway (CR) has successfully achieved financial viability of passenger services.  Passenger fares were substantially increased.  Companies were allowed to cover cost plus an element of profit.  Short distance passenger services were actively discouraged. Many uneconomic branch lines were either closed or separated from mainline working on accounting basis. The IR could never achieve these measures.  Only some minor increase in passenger fare was made in 2013 after gap of 10 years.  IR’s loss from passenger services was more than Rs. 30,000 crores in 2013-14.  Despite having a list of more than 105 uneconomic branch line the IR could hardly close any service. In fact few more services were started to cater the populist demand of political parties.

Since 1999 Chinese Railways introduced an Assets Operation Liability System (AOLS) where 14 Regional Railways Administration (RRA) were given management contract with closely monitored competition with clear benchmark performance indicators, management incentives, both positive and negative to encourage profitability, rather than physical targets. The best performing managers were given significant financial and other incentives, while poor performers were identified and removed. A major restructuring was done by adopting vertical disintegration.  Non-core activities were separated which reduced CR’s staff holding from 3.4 million to 1.7 million employees.  Education & health services were divested along with 38 construction units, four railway design units, different extensive manufacturing facilities for locomotives, coaches, wagons, signaling and communications equipment, track components etc. To handle (a) containers, (b) over sized and perishable cargo, (c) post and parcel, three special purpose companies were created to maintain their own income and expenditure. In contrast, the IR would not be able to achieve any of these measures. In fact the IR has started several new factories to provide various coaching stocks, loco repair activities etc.

The CR also permitted for the formation of local and joint venture railways under separate management who were permitted to compete with CR in railways operations. A new law has been passed to permit foreign investment in China’s Railways sector in accordance with the World Trade Organization (WTO) conditions.  The IR could never achieve these measures. Although, initially IR has permitted 14 private container operators (PCO) number reduced more than half due to number of restrictive laws.  Similarly some Special Purpose Vehicles (SPVs) were initially permitted to connect different ports railways. Their terms and conditions were subsequently revised to reduce their profitability.

Physical Factors

In China there has been rapid growth in railways in recent time. Hence much of its system is new. These incorporate higher design standards. These have high service reliability and less maintenance and low downtime.  On the above pattern they have also amended maintenance patterns of older assets. These maintenance activities are performed in a time bound manner to high standards, so that equipment down time is low and full productivity is utilized. (World Bank 2005: pp-6). On the other had Indian Railways has relatively older assets with old maintenance practice code framed in late 19^th century or early 20^th century.  These manuals and codes have been rarely updated and these have very long down time with shorter utilization time.  Despite this reliability of these assets are very low.  In such situation even new assets did not incorporate performance standards that have since become industry standards worldwide.  Due to extreme departmentalism prevailing within IR, every department is trying to maintain its high manpower base with low performance liability and responsibility and very poor work culture. Due to this most of its assets including locomotive, wagons, coaches, permanent way and structure, signal etc. are not always in a satisfactory state. Speed restrictions, failures of rolling stock and infrastructure affect the productivity and reliability of the particular assets.  Since the railway operation is intricately interwoven, failure of one asset affect entire spectrum of action and activities and propagate shock waves reducing the throughput capacity of broader network segments.

Financial Investment

Massive investment was the hallmark the CR’s development. China has a system levying construction surcharge on freight. This amount was exclusively utilized for investments in construction of new lines with the approval of the planning commission and the state council. Between 1992 and 2002 China invested about US$ 85 billion whereas India invested US$ 17.3 billion only. India has hardly any system of raising fund to improve network, especially for freight services. Even though some funds are collected in the name of development charge and port charge or busy seasons surcharge these proceeds goes to general exchequer and not necessarily to the development of freight service.  After acceptance of 6^th pay commission salary more than 55.41% railway earning is being disbursed for staff salary (Year Book 2011-12: pp8). During the above ensuing period Chinese Railways was able to reduce the number of staff from 3.41 to 1.76 million (51%) whereas IR could reduce only from 1.65 to 1.5 million (91%).  The CR’s operating ratio is much healthier than that of IR. The CR was also able to curb the losses which was incurring in passenger services where as the IR was not able to do anything to curb the losses. Rather it kept increasing year after year. The CR was able to separate on accounting bases all uneconomic branch line, whereas the IR could do nothing to separate or close such services. Thus, the CR was able to generate sufficient surplus and as much as 57% of investment were funded by internal accrual, whereas in IR it was limited to 35%.  Both CR and IR depended for borrowing around 32% and 31% respectively.  The CR depended on government funding for 11% whereas, IR depended up to 34%.  (World Bank 2005: pp6).  Over the years CR become more or less self-dependent for its future development whereas IR could not develop the strategy for future development and was forced to remain totally dependent on the government support.  In the era of coalition politics such government support was coming at a very heavy price affecting its financial and operational cost including capacity cost where additional capacity was being created in uneconomic branch line in the name of social welfare when golden quadrilateral was almost chocking to death. 

By the year 2002 the CR was able to post itself much ahead of IR in terms of network length and standards, realized throughput capacity, labour and equipment (locomotives, wagons, coaches) productivity, maintenance of assets, financial profitability, self financing capacity through rail construction surcharge and restructuring including separation of non core business and introduction of incentives for manager.  During this time Indian railway remained a government department which was not free to decide its destiny and was forced to remain non responsive to the market demand and peoples’ expectation of future development and growth.  The IR was running maximum number of ordinary stopping trains where the cost recovery is estimated to be less than 30%. These consume scare line capacity.  Even on golden quadrilateral and diagonals no body could close such slow passenger services when a few long distance passenger services were introduced or kept free path for port traffic being generated at different ports and leading to hinterland. 

It is interesting to evaluate the trajectory of Chinese Railways to bring about revolutionary change.  In 1991 the Chinese government enacted Railway law which gave the Ministry of Railways, overall control of policy, technical standards, planning, investment and finance, leaving just the day to day management and delivery of rail transport services and infrastructure to the Regional Railway Administration (RRAs).  In a further major stroke, a whole tier of the Chinese Railway management structure - the sub-administration level of RRA was abolished, leaving RRAs with a direct line of management to depot, stations and yards. Sub-administration level was similar to Divisional Railways in Indian Railways.  During this time, against world trend, the IR has increased the number of Zonal Railways from 9 to 17 and number of divisions from 59 to 67, there by increasing substantially the establishment cost particularly the building and infrastructure of new Zonal and Divisional offices.

For improving the financial condition of the CR a few innovative methods were adopted.  For raising capital for new constructions a surcharge was applied to all freight traffic in 1990.  A second surcharge was introduced in 1993 for freight moving on electrified lines and was used for extending electrification over the network. Since 2005 China has encouraged for public private partnership (PPP) for new constructions, including the passenger dedicated lines. Joint Venture Railways established first in 1990 in coordination with local railways monitoring feeder lines financed by respective local government are constructing more than 50 percent of the new infrastructure. (Business Standard June 21.2010:pp2).  At a broader level superior financial management practices have been adopted.  The government has shown willingness to accept market based pricing principles and output decision for passenger and freight traffic.  Unlike Indian Railways, where old financial system prevails and where no meaningful Cost and Benefit Analysis or Profit Center/Cost Center analysis is being done, Chinese Railways implemented modern accounting information system on costs and profit/loss of specific lines of business, services and facilities. Most productive use of available investment fund was made and the government ensured that larger investment budget is available with the CR to ensure faster growth. Privatization was introduced through local railway joint ventures and corporatization with sale of shares in existing railway units, including listing in the New York and Hong Kong exchange (World Bank 2005: pp-7).

In the whole process senior management appeared to have strong commitment to reform to achieve efficiency and profitability backed by strong individual and collective incentives. This was helped by better focused less conflicted objective of the government owner, which was seeking a market based commercial determination of price and outputs, relatively free of unprofitable public service obligation and employment generation demands.  The government was willing to grant railway management related autonomy to achieve the agreed objectives, together with the associated accountability. The CR could achieve higher success as whole process has been pragmatic coupled with bold initiatives, clarity and continuity. Major rationalization measures initiated by Chines Railway have entailed massive investment as well as drastic disinvestment. Many railway stations with low volume of freight have been closed; short distance passenger traffic has actively been discouraged to release capacity for long distance rail travel. Following a productivity lay out adjustment locomotive depots, passenger car depot vehicle depots, passenger transportation section and train crew districts (like Running Room in IR) were all reduced.  By 2005 CR transferred some 900 schools and colleges and 400 hospitals to local governments. Surplus staffs, not directly involved in railway operations were transferred to diversified economy companies, (Business Standard Jun 21,2010: pp. 2). Now the Chinese Railways are organized in a more modern and business like manner. Five major railway corporations one each for (a) rolling stock, (b) railway construction, (c) goods and material (d) civil engineering, (e) signaling and telecommunicate have been separated from rail transportation. These enterprises have been made autonomous, although state owned.  A number of passenger and freight transport companies have been created to operate on a competitive basis. To attract foreign capital Chinese rail enterprises were encouraged to issue stocks on overseas stock markets. In 2001, even foreign participation in rail freight transportation was permitted (Ramnath Rangaswamy 2008; Emerging Markets: pp2).

Technology transfer from Japanese and European companies have enabled China’s railway supply industry to acquire the know how to build rolling stock ranging from 350 KMPH EMUs to heavy haul locomotives. Matching advancements have been made in track and signaling technologies.  China has emerged as a strong manufacturer of railway equipment as much as an increasing market for it. At the present rate of growth China would potentially be the global leader in rail related technology and production. Presently Chinese railway is busy developing its capacity and quality for freight and passenger traffic in line with the outstanding economic growth. By 2007 Chinese railways moved 3300MT of freight.  The Indian Railways could achieve million ton marks only in 2012-13 by loading1007 million MT. On a global basis China’s rail transport volume is one of the world’s largest having six percent of the world’s operating railways and carrying 25% of the world’s total railways workload (Rangaswamy 2008: pp1). Chinese Railways already operates 2700-meter long 20,000-ton heavy haul coal trains at the speed of 120KMPH.  Its containerized freight traffic is slated to reach 400 million tones by 2020 from 64.5million tons in 2006.  Presently Chinese Railways’ development plan have centered on high technology and a judicious mix of traffic routes for passenger trains running at 200 KMPH and freight trains at 120 KMPH. 

To achieve the above target Chinese Railways track structure is being constantly upgraded.  Passenger dedicated lines have ballast less track and the heavy haul high density lines, originally laid with jointed 60 kg/m rail in 25m length on the east bound loaded track is being replaced by continuously welded 75 kg/m rail on 2600-2700 mm long sleepers laid at 1840 per km. Four large equipment bases at Beijing, Shanghai, Wuhan and Guangzhou have been constructed which are aided by 35 modern satellite depots across the network.  On dedicated heavy haul corridors wagons of aluminum or stainless steel body with 25 tones axle load, fitted with rotary couplers, and for up to 120 KMPH operations are being provided progressively (Business Standard 2010: pp1). By 2007 Chinese Railway owned 578,000 freight wagons 44,000 coaches and 18,300 locomotives.  Indian Railway has 239,321 wagons, 46,722 conventional coaches (61,899 all coaches) and 9549 locomotives.  Its route length is 64,600 km.  On the number of passenger front Indian Railways is much ahead than that of Chinese Railways as it carried  8,224 million passenger in 2011-12 against 1400 million passengers by the Chinese Railway in 2008.  However, in India 4,377 million passengers travels only short distance suburban services making just 6 % of total passenger revenue. In terms of passenger km, in 2011-12 suburban services makes 144,057 million km and non-suburban services contributes 902,465 million km traveling average lead of 32.9km and 234.6 km respectively.  In terms of number of passenger proportion, suburban contributes 53.23% whereas non-suburban constitutes 46.77%.  Average speed of Indian mail express train has been 50.2 KMPH and suburban trains 40.5KMPH.  (Indian Railway Year Book, 2013: pp3, 48 to 53).  However the quality of passenger travel in the Chinese is far superior.  China has express trains with speed of 300 KMPH whereas maximum speed of a passenger train in India is around 130 KMPH.  China has recently provided rail connection up to Tibet. India has, hardly constructed any rail connection to Ladhak and Arunachal Pradesh. It may be noted that China is the world leader for running high-speed train in the world. In fact China may be treated as a role model, for what should be done to rationalize the passenger traffic and how passenger services can be made a sustainable business to run for overall benefit of passengers

Thus, Indian railway started much earlier than Chinese Railway and was much better till 1980. During 1990s the major policy decision initiated by Chinese government and strongly supported by Chinese political party on the principal of efficiency and performance brought about total transformation in the Chinese Railway.  Such policy initiative was never taken in the Indian Railways.  During first half of first decade of 21^st century some reforms were initiated bringing some sort of turnaround. However, those processes were never continued and proved to be a short lived affair. The IR started facing the bitter pinch of financial crises.  To overcome this situation, probably a major policy decision is required infusing huge financial investment in critical sector affecting major capacity problem, particularly the golden quadrilateral and diagonals along with all major and emerging ports to make it competitive not only with the emerging road sector capturing greater share of freight traffic of India, but also to make it a major player of the global railway system.

Bibliography

Business Standard June 2010. What India Can Learn form Chinese Amazing Railway System. On http://business.rediff.com/slide-show/2010/jun/21/slide-show-1-what-india-can-learn-from-chinese-railway.htm#1

Railway Board New Delhi. 2012. Indian Railways, Facts & Figure 2010-11

Railway Board New Delhi. 2013. Indian Railways, Year book 2011-12

Ramanath Rangaswamy. 2008. Chinese Railway versus Indian Railways in Emerging Market On http://streamlinesupplychain.wordpress.com/2008/12/14/chinese-railways-versus Indian Railways.

World Bank, Washington DC, 2005: Highway and Railway Development in India and China -1992-2002 (Transport Note 62609).