Indian Railways plans leap into the cyber age

India’s state-owned railways, one of the largest and most profitable networks in the world, plan to leap from the steam to the cyber age with a budget aimed at advancing electronic ticketing and developing 50 world-class stations.

Mamata Banerjee, new railways minister, who presented the budget to parliament on Friday, said the government and private partners would transform big terminuses, including Mumbai, Delhi, Calcutta and Bangalore, to raise them to international standards with shopping, hotels and telecommunications.
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Indian Railways carries 20m passengers a day and employs 1.4m people. Many stations in big cities are overcrowded and largely uncontrolled, with many passengers camped on the platforms and beside the tracks. Deaths are an everyday occurrence.

Ms Banerjee said the network would expand e-ticketing, introduce automated vending machines and issue SMS updates to travellers to confirm travel plans.

Indian Railways would accelerate the development of its fibre-optic cable network for commercial uses, enlisting the leadership of Sam Pitroda, one of the leading minds behind India’s information technology revolution over the past 20 years.

“Everyone knows that India is changing and changing rapidly. Indian Railways has been trying to keep pace with this change ... [Indians] want better connectivity, more employment opportunities,” Ms Banerjee said.

To modernise its customer service, Indian Railways has already launched a successful internet and telephone booking system, and is considering the introduction of Japanese-style high-speed bullet trains. The rail network of 63,000km of track is supported by a 24-hour call centre service, used by about half a million callers a day.

In spite of the improvements, trains and platforms pose a serious risk to travellers. Alongside the threat of collision and overcrowding, concerns over sanitation run high.

“The minister has mooted a number of projects that will carry the railways to the next technology level,” said Harsh Pati Singhania, president of the Federation of Indian Chambers of Commerce and Industry. He highlighted plans to develop retail at stations and equip passenger trains with entertainment services.

India’s rail network is one of the few mixed traffic systems, carrying both passengers and freight, in the world that generates a cash surplus. It ranks alongside rail systems in the US and Canada as a cash generator. The network was forecast to earn revenues this year of $18.4bn (€13.2bn, £11.3bn), up 10.6 per cent on last year, on expectations that travellers would shift to rail over air travel.

One leading Delhi-based industrialist said railway ministers had learnt to leave the running of the railways to the operators and to limit their political interference to pet coach-building projects in their constituencies. Ms Banerjee, the leader of the Congress party-aligned Trinamool Congress, is expected to concentrate on ousting the Communists from power in her home state of West Bengal over direct management of railways.

But others were less impressed. Akhileshwar Sahay, an executive at Feedback Ventures, an infrastructure company, was disappointed the budget made “no serious attempt” to adopt innovative financing measures to close the country’s infrastructure gap and encourage greater private sector participation.

“If India has to grow sustainably at 9 per cent, Indian Railways has to change its positioning from ‘Train to nowhere’ to ‘Train to somewhere’,” he said.

Copyright The Financial Times Limited 2009