India Insights

The Financial Times comments on India rail’s passenger and business enormity, more is coming down the track. Prime Minister, Manmohan Singh’s Independence Day speech describes rail’s “new dynamism”. Even foreign governments are impressed. Iran reportedly sought advice to modernise its system.

Enormity; 8,000 stations and low guestimates 450 passenger journeys monthly. Railway minister Lalu Prasad predicts 6.7 billion passenger journeys for 2008 . He says the present reinvested and rationalised rail industry produced a pre-dividend surplus beyond most Fortune 500s, and plans more restructuring with investment of £28 billion over the next five years, attention now turns to profitising rail’s land bank and stations.

Including chaotic Delhi station (see below) – 350,000 daily users, 256 arrivals and departures from 12 platforms. British architects Terry Farrell & Partners are commissioned to revitalise Delhi station, stage one completed for the 2010 Commonwealth Games. Given high footfall – following the airport model – space may well be designated for commercial and retail purposes. Expect a passenger friendly masterplan, integrating hotel, food courts, foreign exchange desks, ATM’s, improved information and directional signage, departure gates and above all international order. International progress but danger of local loss of character, potentially sad?

Passenger trains are now longer, and more passenger focussed. If first class spaces remain, second-class travelers are upgraded at no extra cost. Ticket billing will increasingly be by prevalent mobile phone accounts, and ATM’s. Oil hikes and pricier air tickets contribute to a 12% July drop in domestic air journeys – down to 3.04 million. Same period first class, air conditioned rail travel leapt 50%.

Freight’s increasing load and train length, and more efficient turn-around, improved revenues. April – July incomes increased 21% to US$ 3.98 billion, on 270 million freight tonnes.

Bottom line, India rail is getting there quickest, carrying the mostest – while being the cheapest.

Given India’s size and circa 130 million households with annual income under US$ 1,000, cheap transport is essential. Given environmental challenges ‘greener’ transport is welcomed.

Indian trains took the pains, now make for gains.