Indian Railways plans to boost operational revenue

The surge in budgetary allocations over the recent years has increased the pace of the railways’ capacity building and all-round modernisation of the country’s rail transportation infrastructure. But whether this would suffice to produce the revenue streams for it to gradually reduce the reliance on taxpayer’s monies will be determined by the tariff policies, ability to attract more passenger and freight volumes, and a critical level of private investments.

The national transporter is working on multiple projects that will boost the passenger segment revenues. For instance, the government is expected to launch Vande Bharat sleeper trains in 2025 which will provide greater comfort over long- and medium-distance journeys. At present, 10 Vande Bharat sleeper trains are under production with the first prototype to undergo field trials shortly.

Simultaneously, the railways are planning to roll out more Vande Metro trains (renamed Namo Bharat Rapid Rail) to cater to the short distance travel. Launched in September this year, the Vande Metro trains go beyond the regular metro trains to provide inter-city connectivity with a blend of modern amenities and enhanced passenger experience.

As per a CRISIL report, as part of train modernisation, the railways has introduced advanced locomotives with elevated passenger services. Besides, station redevelopment and the optimised use of railway land have enhanced infrastructure and unlocked revenue opportunities. “From high-speed rail projects to widespread electrification, investments totalling Rs 17.4 lakh crore between fiscals 2016 and 2025 are helping modernise the railways and reinforce it as a key driver of India’s progress to a high-income economy,” the report said.

Experts said that railways will likely shift towards the PPP (public private partnership) model that will ease the government’s financial resources and fast-track the infrastructure growth. Despite the past failures to build railways stations and trains under the PPP model, there’s a likelihood that railways will build projects on the freight side in collaboration with the private sector.

Meanwhile, the railways are expected to speed up its investments and efforts in the technology space, especially by increasing the use of artificial intelligence (AI) to improve systems and processes. Currently, the AI is being used for predictive analysis and to improve efficiency. For instance, the AI models are utilised to study data and predict availability of seats which increases the overall ticket confirmations. In addition, the railways is using AI-driven predictive maintenance to oversee the condition of tracks and trains. Recently, the railways minister Ashwini Vaishnaw launched the linen inspection and sorting assistant (LISA), a AI-based technology which automatically segregates dirty linens with stains, and ensures full quality inspection of bed sheets used in trains.

On the tech front, the railways introduced a new app called Super IRCTC on Friday for booking tickets, tracking trains, accessing catering services, and travel planning. This app is part of the railways’ efforts to bring all the passenger-related services on a digital platform.

Experts said that railways could look at diversifying its revenue sources to sustain the pace of development and bring its future expansion plans to fruition... “The plans to construct 100,000 km of new railway tracks over the next 20 years, expand the Kavach safety system to cover 44,000 km within five years and equip 50,000 locomotives with this technology, and the production of 400 new Vande Bharat trains in the next three years necessitate additional revenue sources,” said the CRISIL report.

The next year will also see the likely completion of the ambitious dedicated freight corridor (DFC) project.