According to a study undertaken by IIFL, China is making rapid improvements in its high-speed rail network, a concept which is still at a nascent stage in India

Indian Railways, which boasts of one the world’s largest rail network, is set to face stiff competition. The menace comes from none other than China, which has been posing severe competition to various other segments in the Indian economy. China is making arrangements to expand its high-speed rail (HSR) network to 28,000 km, which will be twice as big as similar networks in the rest of the world combined. On the other hand, forget about expansion, India is yet to build an HSR network.

The above fact has been stated in a recent study by the IIFL, the division which looks after institutional equities of India Infoline. The study also stated that while India was ahead of China in 1980s in terms of total length of rail networks and electrified routes, massive expansion undertaken by China in the late 1990s and early parts of the next decade changed the picture completely. By 1996, China overtook India in terms of total length and by 2001 India fell behind China in terms of electrified routes.

An interesting fact reflecting that the growth of Indian rail network has been at a snail’s pace is the fact that the network that stood at 53,596 km in 1950s reached only 64,015 km in the next 58 years, growing at an annual rate of only 180 kms, much slower as compared to other developing nations.

HSR to reduce travel time

In this context, B Narender Reddy, manager of Vijayanand Roadlines Private Limited, a mid-sized transportation firm in Hyderabad says, “Establishing HSR network in the country requires huge investment as well as infrastructure development. At present, we have to develop tracks that can support such high-speed trains. HSR will save travelling time significantly. The same will also enable logistics service providers (LSPs) to meet stiff delivery deadlines.” China had set up HSR network on an experimental basis for first time in 2003 and it plans to invest a huge sum of US$500 billion to expand HSR network by 2014. On the other hand, the concept is still at a nascent stage in India and the proposed investment for the same is also much less as compared to China.

Optimism for HSR

However, commuters and LSPs can look forward to an HSR network in India in the near future. Railway minister Mamata Banerjee declared during the Rail Budget last month that six high-speed train corridors will be set up under the public-private partnership (PPP) model. Ms Banerjee also said that a National High-Speed Rail Authority will be established to supervise the execution of these corridors designated for trains running at a pace of above 250 km/hr. 

However, fares of these trains still remain a concern for LSPs, with many believing that availing services of these trains will be an expensive affair. “The high-speed trains will be definitely expensive considering their operational and maintenance costs. They will not be of much use if high fares take a toll on profit margins of LSPs,” comments Winston Vinod Kumar, manager of Geo Logistics, a mid-sized logistics firm in Bengaluru.

 However, experts are of the opinion that the establishment of an HSR network will not only add a new chapter in the glorious history of the Indian Railways but the same will also boost economic activities of the country.

Arup Choudhury