Right signals: PMO does well to apply brakes on two of railways' mega plans

The Prime Minister’s Office (PMO) has reportedly turned down two ambitious proposals of the railway ministry. The first pertains to the bold initiative to go in for 100 per cent electrification of the country’s railway network by 2021-22. Railway Minister Piyush Goyal, who took charge in September last year, and was the minister of state for power till then, was of the opinion that the shift from diesel to electricity over the remaining stretches could save the country as much as Rs 100 billion annually. The other key proposal that has not found favour with the PMO is an equally ambitious plan to introduce a new signalling system, based on the so-called European Train Control System-Level 2 technology, across the entire Indian railway network. On the face of it, both the goals of the railways ministry are commendable. Yet, a closer analysis of the issues bears out the wisdom of the PMO’s advice.

Take, for example, the issue of 100 per cent electrification of railway routes. Even though it looks appealing, full electrification at one go may be impractical. That is because, on many routes where traffic is not heavy, diesel turns out to be the cheaper option and electrification requires considerable upfront capital expenditure. The better way is to fast-track the implementation of the strategy that the railways have adopted till now — approach electrification from the point of view of optimality. Over the years, the railways have electrified high-traffic routes based on the projected rate of return on the heavy capital investment. Studies have found that the projected return on investment is not favourable for a majority of the 38,000-km route that remains to be electrified.

Moreover, a sudden push for speedy electrification will mean the end of the road for the existing 5,800 working diesel locomotives. Also, if the Indian Railways goes ahead with the proposal, it will have to renege on its promise to the US multinational General Electric, with whom the government had signed an agreement in 2015 to build a modern diesel locomotive factory to supply diesel engines over the next 10 years. Lastly, while full electrification might be seen as a sign of being a developed country, the fact is that even European countries do not have full electrification — almost 20 per cent of their tracks are run on diesel.

There are question marks over the second plan as well. Adopting advanced signalling technology involves a lot of cost. According to the railway ministry’s own estimates, the ETCS-Level 2 implementation will lead to an expenditure of Rs 780 billion. What makes this cost even harder to justify is the fact that this technology is mainly used in high-speed systems around the world, and is largely untested in Indian conditions, which, apart from being nowhere as fast on average, also have very high traffic density. Here, too, the PMO’s suggestion of conducting pilot runs and adopting a staggered approach makes ample sense. There is no harm in carrying out extensive trials in a section with heavy traffic density first, and then take a call depending on its success.

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