INDIN RILWYS PRESENTTION BY SUDHIR KUMR, IS Officer on Special Duty/Minister for Railways
INDIN RILWYS IN FINNCIL CRISIS Indian Railways is today on the verge of a financial crisis. To put it bluntly, the Business s Usual Low Growth will rapidly drive IR to fatal bankruptcy, and in sixteen years Govt. of India will be saddled with an additional financial liability of over Rs.61,000 crores. On a pure operating level, IR is in a terminal debt trap. - Expert Group on IR headed by Dr. Rakesh Mohan July 2001. 01
RUSTIC BRILLINCE xk; dk iwjk nw/k ugha nqgus ls xk; chekj gks tkrh gs ( If you do not milk the cow fully, it falls sick. ) osxu jsyos dk dekå?kksm+k gs] ml ij iwjk cks>k ykfn, mls nksm+kb,] csbkdj er lm+kb, ( Wagon is the bread earning horse of the Railways, load it adequately. Make it run and don t stable it. ) Shri Lalu Prasad, Minister for Railways July 2004 02
IR IS PLY ON VOLUMES What is the VRIBLE component of the Rupee Others 9% Lease Charges / Dividend / DRF / SRSF / DF 27% Fuel & Stores 22% Salary & Pension 42% 03
1300 1100 IR IS PLY ON VOLUMES Index of T.W.E., Unit cost of PKMs, NTKMs at current prices (81-82 to 03-04) Index of T.W.E. 900 Index 700 500 Unit Cost Index of PKMs 300 Unit Cost Index of NTKMs (2000-01) 100 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 1981-82 1991-92 1997-98 2000-01 2003-04 T.W.E. (in Billion Rs.) 32 124 259 347 395 T.W.E. CGR(%) 14.56 13.06 10.24 4.40 Total Earnings (in Billion Rs.) 36 138 286 353 428 Total Earnings CGR(%) 14.53 12.83 7.30 6.68 BTKMs 164 250 284 312 381 BTKMs CGR(%) 4.30 2.15 3.19 6.87 04
240 220 IR IS PLY ON VOLUMES HOW LONG IS LONG-TERM (LTVC may be taken as 78.5% F.Code, para 217) Index of T.W.E. at constant prices and GTKMs Index of GTKM 200 Index 180 160 140 120 Index of T.W.E. 100 (1982-83) (1990-91) (2000-01) 80 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 1981-82 1982-83 1990-91 2000-01 2003-04 1981-82 to 2003-04 GTKM (Billion) 500 518 705 1007 1166 T.W.E. (Billion Rs.) 32 34 40 35 33 CGR GTKM - - 3.89% (1981-82 to 1990-91) 3.63% (1991-92 to 2000-01) 5.00% (2001-02 to 2002-03 - - 3.92% Years (1981-82 to 2003-04) 05
245 225 205 IR IS PLY ON VOLUMES Index of NTKM and cost per NTKM at constant prices Index of NTKm 185 165 Index 145 125 105 85 65 45 25 (1990-91) Index of Cost per NTKm 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 1981-82 1990-91 2000-01 2003-04 1981-82 to 2003-04 NTKM (Billion) 164 236 312 381 - Cost per NTKM (Paise) 12.39 10.01 6.09 4.28 CGR NTKM - 4.10% (1981-82 to 1990-91) Freight Earnings at Current Prices (Billion Rs.) Freight Earnings at Constant Yield (Billion Rs.) 2.85% (1991-92 to 2000-01) 6.87% (2001-02 to 2003-04) 24 84 233 276 24 34 45 55 Rate Per NTKM (Paise) 14.35 35.66 74.61 72.44-3.90% (2000-01) Years (1981-82 to 2003-04) 06
250 225 200 IR IS PLY ON VOLUMES Index of PKM and Unit Cost at constant prices Index of PKm 175 Index 150 125 100 75 50 25 Index of Cost per PKM (1992-93) (2000-01) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 1981-82 1992-93 2003-04 PKM (Billion) 221 300 541 Cost per PKM (Paise.) 7.19 6.44 3.42 Years (1981-82 to 2003-04) Passenger Earnings at current prices (Billion Rs.) Passenger Earnings at Constant Yield (Billion Rs.) 10 43 133 10 13 24 Earnings PKM (Paise) 4.48 14.37 24.53 07
IR IS PLY ON VOLUMES 1200 1100 Index of Unit Freight Cost and Realisation at Current Prices Index of input cost Index 1000 900 800 700 600 500 400 300 200 Index of Cost/NTKM Index of Earnings/NTKM 100 1981-82 1986-87 1990-91 1994-95 1999-00 2003-04 1981-82 2003-04 Years Index of Input Cost 100 1188 Cost/NTKM (Paise) 12.39 50.89 Earnings/NTKM (Paise) 14.35 72.44 08
IR IS PLY ON VOLUMES 100 Operating Efficiency, Technology and Productivity Gains 90 Index 80 70 60 50 Index of Energy Consumption Index of Wagon Turn-Round 40 30 1980-81 1990-91 1995-96 1999-00 2003-04 1980-81 2003-04 Wagon Turn-round 15.2 6.7 Energy Consumption (in thousand Frt. GTKM) Years 30.6 14.15 09
IR IS PLY ON VOLUMES 100 Operating Efficiency, Technology and Productivity Gains 95 90 Index 85 80 75 Index of Diesel Consumption 70 65 60 Index of Electricity Consumption 55 1980-81 1990-91 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 Years 10
300 IR IS PLY ON VOLUMES Operating Efficiency, Technology and Productivity Gains 275 250 Index 225 200 175 NTKM per Wagon Day Traffic Output (in 000)/ Employee 150 Traffic Density MGTKm/Running Track Km 125 100 1980-81 1990-91 1995-96 1999-00 2003-04 1980-81 2003-04 Years NTKM Per Wagon Day 986 2570 Traffic Density MGTKm per Running Track Km Traffic Output (in thousand) Per Employee/annum 8.84 15.92 244 686 11
IR IS PLY ON VOLUMES KEY STRTEGY Play on freight volumes to reduce unit cost. a) Enhancement of carrying capacity of wagons i) BOX-N increased from 60 tonnes to 70 tonnes ii) BCN increased from 58 tonnes to 63 tonnes b) Reducing turn around time of wagons from 7 to 5 days. Implement three categories of investments on HDN in parallel Upgrade existing infrastructure for higher operating efficiency Invest in additional track capacity/electrification of routes Increase reliability of systems (wagons/coaches, locos, tracks, signalling) Operating strategy for maximisation of throughput 12
IR IS PLY ON VOLUMES KEY STRTEGY Reduce passenger losses by a) increasing occupancy of trains through passenger profile management b) Increasing volume of upper class travel c) ugmenting load of well patronized trains to 24 d) Reducing losses on catering and parcel by 50% in 2005-06 13
IR IS PLY ON VOLUMES REDUCING THE TURN ROUND TIME OF WGONS TO 5 DYS COMMERCIL, OPERTIONL & INVESTMENT ISSUES Full rake placements Round the clock working Electrification of diesel sidings on electrified routes mendment in Preferential Tariff Schedule (PTS) Faster train examination 14
IR IS PLY ON VOLUMES TRIFF RTIONLISTION IR has no real competition in door to door bulk and heavy freight delivery beyond 400 kms a) Freight of raw materials/minerals increased. b) Freight of finished products reduced. Scraping of minimum weight condition concept 4000 commodities grouped into 19 commodity heads with single uniform class for different commodities in the same group. 15
HITHERTO RECIPE FOR SOLVENCY Passenger Fare Index 325 250 175 Increase in Passenger Fares (from 1990-91 to 1999-2000) 310 250 208 165 100 Year 1990-91 1999-2000 C First Class C - 2 Tier Sleeper (Mail/Exp) Second Class (Mail/Exp) 15 a
HITHERTO RECIPE FOR SOLVENCY Increase in Freight Rates of Major Commodities (from 1990-91 to 1999-2000) Rate per Tonne Index 225 200 175 150 125 214 201 197 186 178 100 Year 1990-91 1999-2000 Cement Coal Iron & Steel Fertilizer POL (HSD) 15 b
IR IS PLY ON VOLUMES NINTH & TENTH FIVE YER PLN TRGET ND CHIEVEMENT 750 624 725 Million Tonnes 600 450 300 525 493 Target chievement 2006-07 (Proj.) 150 0 9th Plan 10th Plan Freight loading target is likely to be surpassed in 2005-06 and is likely to be exceeded by 18-20% in 2006-07. 16
IR IS PLY ON VOLUMES NINTH & TENTH FIVE YER PLN TRGET ND CHIEVEMENT 500 400 353 333 396 460 BTKMs 300 200 Target chievement 2006-07 (Proj.) 100 0 9th Plan 10th Plan Freight tonne Km target has been surpassed by 4% in 2004-05 and is likely to be exceeded by 16% in 2006-07. 17
GROWTH IN PSSENGER, FREIGHT, OTHER COCHING ND TOTL TRFFIC ERNINGS NO PSSENGER FRE HIKE NO PRCEL RTE HIKE 25 IR IS PLY ON VOLUMES 21 20 18 Percent 16 15 10 10 11.4 7.4 9.8 2004-05 pril-sept.05 6.1 5 0 Passenger Freight earnings Other Coaching Total traffic earnings earnings earnings 18
IR IS PLY ON VOLUMES Operating Ratio 105 98 Operating Ratio (%) 100 95 90 85 80 75 91 87 70 2000-01 2004-05 2005-06(Projected) Year 19
IR IS PLY ON VOLUMES MIDS TOUCH NET REVENUE Net Revenue (Before Dividend) (Rs. in crore) 8000 6300 4300 2300 1071 5274 8000 300 2000-01 2004-05 2005-06(Projected) Year 20
IR IS PLY ON VOLUMES GROWTH IN FUND BLNCES Fund Balances (Rs. in crore) 14400 9700 5000 7800 11000 359 300 2000-01 2004-05 2005-06(Projected) Year 21
IR IS PLY ON VOLUMES CHLLENGES HED Bringing down unit cost of freight traffic at current prices by 50% over five years:- a) Universalization of 22.9 t axle load on IR. b) Increasing axle load for iron ore movement from 22.9 to 25 tonnes. c) Improving loaded empty ratio to 75% over a period of 3-4 years. d) Transformation of IR from a bulk transporter to a multi-modal transporter. Promoting a consolidation industry for non-bulk traffic ggressively promoting EXIM and domestic containerized movement through PPP Development of integrated multi-modal logistics parks Technology upgradation and modernisation including application of IT. Construction of dedicated Freight Corridors. 22
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