Idea 4

Let a new corporation challenge Indian Railways

It takes just four hours and 48 minutes to travel the 1,318-km distance between China’s political capital Beijing and financial capital Shanghai on a ‘high-speed’ bullet train. The distance between India’s capital and its financial hub— 1,384 km—is almost the same. The fastest train between Delhi and Mumbai, the Rajdhani Express, covers the distance in 16 long hours, clocking an average speed of 90 kmph, a third of the near 300 kmph speed of China’s high-speed trains.

A high-speed rail corridor between Delhi and Mumbai wouldn’t simply slash the time of travel. It would also cut costs. It would make rail travel a near perfect substitute for air travel. Think of the benefits of avoiding the time-consuming hassle of airports. For those still determined to travel by air, it would bring down the cost of a ticket as airlines cut fares to stay in business. There is plenty of evidence in support of that from China. A high-speed railway network could also save India precious foreign exchange on imported jet fuel as more people travel by rail than by air. It could ease the pressure of rapid urbanisation on India’s metropolitan cities by spurring the growth of satellite cities within a 100-150 km radius.

China has already built 10,000 km of dedicated high- speed railway tracks. It has planned a 4+4 high-speed rail network with four separate corridors connecting the North and South of the country and four corridors linking the East and West. India still believes that high-speed trains are a luxury and waste of money.

Sure, high-speed trains are not going to be affordable for many Indians—most cannot even afford the Railways’ Rajdhani or Shatabdi services. But then, neither is air travel ‘affordable’. In fact, the Government treated aviation as a luxury until the 1990s and only a tiny minority of Indians would travel by air—ironically enough, aboard a State- owned airline. After the 1990s, by investing in aviation— that is, by building more airports, better airports, and by opening the skies to more carriers—the Government has made air travel affordable for millions of more Indians. Therefore, whether a service is affordable for everyone is a poor basis to make investment decisions.

India needs to choose once and for all: does it want to keep wallowing in poverty or invest in a wealthy future? The country will only invest in high-speed trains if it adopts the maxim of the Chinese reformist Deng Xiaoping: ‘To be rich is glorious.’ After all, what seems like a luxury in 2014 may become a necessity in 2034 as India grows rapidly and moves from being a poor country to a middle-income one. The biggest challenge with infrastructure is to think in advance: India can’t wait to become rich before it invests in world-class infrastructure, including high speed trains. If anything, building that infrastructure now will speed up the transition to prosperity.

High-speed trains aren’t only about faster travel from Delhi to Mumbai. Superfast rail links over shorter distances may actually have significant positive spillover effects that are greater. Consider what might happen if it became possible to travel to a metropolis like Delhi or Mumbai or Bangalore in, say, half an hour from a place 120 km away. Let’s face it: the prospects of getting a good, well-paying job are still highest in a metropolitan city. But the financial costs of living in a big city (especially housing) and the relatively intangible costs of traffic, pollution and crowds extract a heavy toll. What a high-speed rail link with satellite cities in a radius of 100-150 km could do is enable officegoers to move out of crowded and expensive big cities to smaller towns where real estate would be much less expensive, traffic more manageable and pollution far easier to survive. In sum, you could have a superior quality of life if your job in Delhi or Mumbai were linked by high-speed rail to an urban centre a safe distance away.

Apart from benefits to individuals, such quick mobility would also ease the pressure of urbanisation on big cities by spurring the growth of satellite towns. It will also create jobs in satellite towns as services come up to meet the demands of a new residential population. It’s a win-win situation for all. It would make eminent sense to initiate a set of pilot projects for a high-speed rail system to cover short distances. The costs would be lower, there would be learnings for bigger projects to follow, and the economic benefits would be huge.

The real question is how India must go about setting off a high-speed revolution in a railways system where trains run slower than they did in Germany of the 30s or America of the 50s, or where the new rolling stock that emerges from rail coach factories is of 1980s’ vintage. It will certainly not happen in the labyrinthine corridors of the massive—and usually inert—bureaucracy of the Indian Railways.

So the first step is to keep the Indian Railways out of the high-speed rail project. In any case, it would need separate infrastructure. Special tracks, for example, would have to be laid for such trains. The entire network would have to be access-controlled. You cannot have people or animals straying on to the tracks if safety and on-time efficiency are not to be compromised. Inevitably, there will be a need for new stations as well.

If there has been one public sector undertaking that has served as a role model in recent times, it is the Delhi Metro Rail Corporation (DMRC), which has done an excellent and time-bound job of constructing the Delhi Metro, a complicated exercise. That doesn’t necessarily mean that a High Speed Rail Corporation must ape the DMRC in every way. What it does mean is that the entity that is tasked with constructing the network should be a corporate entity, entirely autonomous in its functioning from the Government, even if the Centre provides most or all of its funds. What it also means is that the head of the corporation, the CEO, should be selected on merit and given a clear mandate to execute the project. By way of accountability, let that be directly to the Prime Minister’s Office and not to the Ministry of Railways. Like the Delhi Metro, the new High Speed Rail Corporation should not hesitate to use the best available technology (incidentally, bullet train technology is not new; it was first used in Japan in the 1960s), even if it means importing it from China, which is the only emerging economy to have built a high-speed rail network so far.

The quantum of money required for a high-speed rail network is much more than for several city Metro projects put together. Where the High Speed Rail Corporation may have to be different from the DMRC is in involving private investors, including foreign investors. But given the risks involved, and the uncertainty of returns, most of the seed money will have to come from the Government. But given the Centre’s precarious fiscal situation, that may take some years to address. The new High Speed Rail Corporation may have to look for innovative means to raise money. One way could be for the Government to underwrite an offer of bonds to the general public. Why not let the aam investor also partake in this project of national importance?

The prospect of a new corporation challenging the supremacy of the Indian Railways may finally spur the lethargic bureaucracy of Delhi’s Rail Bhavan into action. While high-speed railway travel is important, it need not be restricted to the 300 kmph category. There is a desperate need to upgrade the Rajdhani and Shatabdi Express trains from their current 90 kmph average speed to at least 150 kmph. This can be done with the existing track infrastructure and current rolling stock and rail engine capacities, provided more technology is deployed to improve safety. Much relief could be provided to travellers with this upgradation. It is possible to travel between Delhi and Mumbai in 10 hours with minor changes in the existing infrastructure.

It isn’t impossible. All it requires is the mindset of India’s next Government to be on a fast track.

Dhiraj Nayyar is CEO of Think India Foundation

About The Author

Dhiraj Nayyar

Dhiraj Nayyar is chief economist, Vedanta Ltd, and the author of Modi and Markets: Arguments for Transformation

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