Freight Services of Indian Railways

Indian Railways earns about 70% of its revenues from the freight traffic (Rs. 686.2 billion from freight and Rs. 304.6 billion from passengers in 2011–12). Most of its profits come from movement of freight. It makes a loss on passenger traffic. It deliberately keeps its passenger fares low and cross-subsidises the loss-making passenger traffic with the profit-making freight traffic.

Since the 1990s, Indian Railways has stopped single-wagon consignments and provides only full rake freight trains for goods. Most of its freight earnings come from movement of bulk goods such as coal, cement, food grains and iron ore in full rakes. It is continually losing freight traffic to road.

Freight is a profit making business segment of Indian Railways and is the backbone of railway revenues. Over the years the market share of Indian Railways has been consistently shrinking and railways was losing out to road. Indian Railways laid down detailed freight operational and marketing strategies for the Five-year plan to regain the lost market share. Achievement of projected freight targets largely depended on the manner in which the Indian Railways reshaped its policies and strategies not only to regain the lost share in freight traffic but also to provide value for money to customers in terms of better facilities and improved services.

The recent growth in freight loading due to more intensive asset utilisation and adoption of market responsive strategies has brought into focus its long term sustainability. Subsequent reviews of the impact of enhanced loading in the zones have amply demonstrated that the current infrastructure was overstretched and capacity enhancement was essential to sustain the enhanced loading strategy in the long run. Major freight terminals that handle more than 30 rakes every month, including those identified for modernization were also deficient in basic facilities leading to heavy terminal detentions of rolling stock, which needs to be urgently addressed. Majority of the respondents to the survey of terminal/siding owners also echoed similar sentiments. Customer perception also indicated that the mechanism of supplying rakes as per the demands of customers required improvement. This coupled with enroute detentions to rakes on account of stabling and inefficient interchange commitments between zones were bottlenecks in efficient delivery of freight services.

The various freight schemes introduced to capture piece meal traffic were only operating sporadically in some zones. Performance of the individual incentive schemes in terms of incremental freight loading achieved was not evaluated. Considering that the average annual growth of 8.1 per cent in freight loading more or less corresponded to the average annual growth of 8-9 per cent in Gross Domestic Product during the last five years, the incentive schemes at best contributed to retention of the market share. The marketing strategy needs to be restructured for improving the market share of Indian Railways.

Dedicated Freight Corridor (DFC Project of Indian Railways)
The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) is a corporation run by the Government of India to undertake planning & development, mobilisation of financial resources and construction, maintenance and operation of the Dedicated Freight Corridors. DFCC has been registered as a company under the Companies Act 1956 on 30 October 2006.

Need for Dedicated Freight Corridor Project :
The Indian Railways' quadrilateral linking the four metropolitan cities of Delhi, Mumbai, Chennai and Howrah, commonly known as the Golden Quadrilateral; and its two diagonals (Delhi-Chennai and Mumbai-Howrah), adding up to a total route length of 10,122 km carries more than 55% of revenue earning freight traffic of IR. The existing trunk routes of Howrah-Delhi on the Eastern Corridor and Mumbai-Delhi on the Western Corridor are highly saturated, line capacity utilization varying between 115% to 150%. The surging power needs requiring heavy coal movement, booming infrastructure construction and growing international trade has led to the conception of the Dedicated Freight Corridors along the Eastern and Western Routes.

Historical Perspective :
Accordingly, the seeds for the project were sown as early as in April, 2005, wherein, Hon'ble Prime Ministers of India and Japan made a joint declaration for feasibility and possible funding of the dedicated rail freight corridors. Hon'ble Minister for Railways, almost at the same time, announced in the Parliament the need and planning for the project. Immediately thereafter, RITES was entrusted with the feasibility study of both eastern and western corridors. In May 2005, Committee on Infrastructure (COI) constituted a Task Force, chaired by Shri Anwarul Huda, Member Planning Commission to prepare a concept paper on Delhi-Mumbai (Western) and Delhi-Howrah (Eastern) dedicated freight corridor projects, and to suggest a new organizational structure for planning, financing, construction and operation of these corridors. RITES, in January 2006, submitted the Feasibility Study Report of both the corridors to Ministry of Railways. Almost simultaneously, the Cabinet approved the report of the Task Force of the COI, which directed that a SPV should be set up to construct and operate the DFC. Cabinet Committee on Economic Affairs (CCEA) gave "in principle" approval to the Feasibility Study report asking the MOR to go ahead with Preliminary Engineering cum Traffic Survey (PETS) for the two corridors, firm up the cost of the project and work out the financing options. In consonance with the recommendation of the Task Force of COI, a SPV, named "Dedicated Freight Corridor Corporation of India Limited (DFCCIL)" was incorporated under Companies Act in October 2006. Subsequently, RITES submitted the PETS Report based on which the project was approved at a cost of Rs. 28,181 Crore.

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History of Indian Railways
  • The history of rail transport in India began in the mid-nineteenth century. The core of the pressure for building Railways In India came from London. In 1849, there was not a single kilometre of railway line in India. A British engineer, Robert Maitland Brereton, was responsible for the expansion of the railways from 1857 onwards. Read More
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