With the Government of India taking steps to develop dedicated freight corridors, railways will play an instrumental role in the development of the country’s logistics sector Indian Railways, world’s second largest rail network, has played an integral role in the development of the country’s industrial and economic landscape for over a century. Of the two major sections of the Indian Railways - freight and passenger - the former generates roughly two-thirds of revenues. According to a study by RITES, more than 35% of India’s freight traffic is handled by railways.
Railways and logistics sector
According to a report by Cushman & Wakefield, the Indian logistics sector is estimated to grow annually at the rate of 15-20%, notching up revenues of approximately US$385 billion by 2015. With the rise of freight traffic by truck and private cars along the highways and roads, traffic congestion is likely to increase immensely. In such a situation, rail would be a more cost-effective mode of transport and is also expected to lower carbon emissions.
The Government of India (GoI) has recently opened up the rail network to private companies with investment capital and integrated logistics expertise so that the growth and efficiency of the rail system can be rapidly expanded and fully leveraged in the coming years. The objective is to consolidate the presence of rail in the overall transport chain and attain higher freight traffic via railways. The plan to establish mega logistics hubs in eastern and western corridor and the policy to allow private freight terminal will provide a fillip to the logistics sector.
 Another positive development is highlighted in the Vision Document of the Ministry of Railways, which has set a target of enhancing the freight share of Indian Railways from the current 35% by creating adequate carrying capacity, achieving cost-effectiveness and providing new value-added services. Existing land banks are to be utilised to set up multi-modal logistics parks and industrial hubs along the proposed dedicated freight corridors.
Capacity enhancement work along high density rail network and wagons with higher payload to tare ratio are intended to be deployed. The eastern and western dedicated freight corridor is expected to become operational by 2020. As per the recommendations of the Planning Commission about 1,000 km of rail network should be added every year for the next 10-12 years.
Rail link is vital for several projects like Delhi-Mumbai Industrial Corridor (DMIC) that is coming up in the country. Several containers from ports are to be moved via rail links and therefore it is important to connect major ports to the railway network.
Some suggestions for ensuring timely development of this important sector of the economy are as follows:
· Development of new technology for cargo and stack trains
· Roll-on-roll-off trains, which have been in use by Konkan Railways, can give a major boost to Indian Railways in handling freight traffic all over the country with minimal effort and help ease congestion on roads and save fuel
· Connect to nation’s important ports, special investment regions (SIRs) and special economic zones (SEZs)
· High-speed rail link can relieve existing rail capacity from passenger to freight transport
· Closing of network gaps and removal of capacity constraints in the rail network
· Evaluate the existing private sector participation policy in rail logistics with a view to analyse whether they are be able to compete with the railway sector.
Ajay Sinha, regional director - Corporate Development, EMD Locomotive Technologies Pvt. Ltd (Subsidiary of Electro-Motive Diesels, Inc.) a leading manufacturer of diesel electric locomotives headquartered in LaGrange, Illinois in the US |
