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| “Our vision for the Indian Railways is to invest more amounts over the next five years, than what we invested over the last 154 years.” |
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| “Leveraging, synergising, and optimising – these are the three words which will summarise the entire strategy.” |
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getting more bang with the same buck. You have to get more out of less and multiply scarce resources in the short-run.
When we took charge at the Rail Bhavan, we had a reserve cash of Rs.3 billion (Rs.300 crores). But, the real challenge of leveraging was to multiply it into Rs. 200 billion (Rs.20,000 crores). We identified that the length of a typical freight train – which is 686 metres – is the biggest multiplier of all investments. Railways don’t accept goods that are 20 miles long or a wagon load, but accepts nothing less than a full train load. We made the terminals 686 metres long, because we have good sheds, with lengths of about 200, 300, and 400 metres. When the train arrived on the outskirts, the goods were placed in the train not in a single installment but in two to four installments. This was because the length of the platform was only 300 metres, and every installment took 24 hours. We decided to extend the length of the platform in the first phase, and invested Rs. 2 billion (Rs.200 crores) on the extension of land. We also decided to increase the length of the goods sheds that handled 30 trains per month. So, we had to prioritise according to the availability of the resources. For us, this was a low cost investment for a short gestation (about three to four months), with rapid payback. The day the length was extended, the turnaround time of wagons and trains had a |
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beneficial impact and high returns, yielding Rs. 3 billion (Rs.300 crores) and Rs. 100 billion (Rs.10,000 crores) respectively.
Rail Roads to Future
Our vision for the Indian Railways is to invest more amounts over the next five years, than what we invested over the last 154 years (1853-2007). It is our dream to overtake China in Railways. China invested about $10 billion annually in the 90s, while, we invested $2 billion annually, which was five times lower. This year, we will invest about $10 billion, and our target for the 11th five-year plan is to invest, on an average, $12 billion per annum.
With annual surplus, we plan to generate an internal surplus of Rs.900 billion (Rs.90,000 crores). We can leverage this amount to easily raise Rs.1.8 trillion (Rs.180,000 crores). When Railways’ annual surplus was Rs.2 billion (Rs.200 crores), we were borrowing Rs.40 billion (Rs.4000 crores). Now, our annual cash surplus is Rs.200 billion (Rs.20,000 crores), but we are borrowing Rs.30.5 billion (Rs.3,500 crores). If you observe the contrast, the potential to borrow is far more, and therefore can be leveraged. To sum up, the central objectives of this expansion are: reduce unit cost of appreciation, double throughput, increase the train’s speed, and provide world-class facility to customers. |
