China, India should fight for connecting 40% of global population by developing Railway network

International Union of Railways (UIC) had ranked India as 4th and China as 2nd largest rail network in the world. On doing a little study of these two strongest rail network one could observe that both the countries are aiming to improve their rail network for unifying the nation, incorporating domestic market, encouraging economic growth and reaching far flung boundaries. While China has a focus of expanding its railway track length from 124000km to 274000 km by 2050, India is still struggling to maintain the current track line and improve the quality of travel by introducing High Speed Trains. 

At the time of independence India had a stronger railway network with 53596 km of route covered over China which had 27000km of route length in 1945. Since then both the countries had covered a tremendous journey of developing their rail connect but on studying the facts it is been noted that China had taken a leap ahead in terms of expanding and improvising its railway.

Photo taken on June 26, 2017 shows the China's new bullet train "Fuxing" at Beijing South Railway Station in Beijing, capital of China. China's next generation bullet train "Fuxing" debuted on the Beijing-Shanghai line on Monday. A CR400AF model departed Beijing South Railway Station at 11:05 a.m. for Shanghai. At the same time, the CR400BF model left Shanghai Hongqiao Railway Station for Beijing. The new bullet trains, also known as electric multiple units (EMU), boast top speeds of 400 kilometers an hour and a consistent speed of 350 kilometers an hour.[Photo: Xinhua]

Both the countries had nationalized railway network with minimum interference of private players. The total track of India is 119630 km with 92081 km of running track over route of 66687 km and 7216 stations (2015-16). On the other hand China had total track of 121000 km which includes 19000 km covered by the high speed train. In the year 2015-16, the Indian Railway carried 8.107 billion passengers which was more than three folds of what China Railway Corporation carried. The freight carried in 2015-16 was 1.101 billion which is way too less than the 3.813 billion carried by China. India is losing its freight share from 65% in 1951 to 30% in 2012-13 to other modes of transport majorly to road transport. The reason for this loss is the neglect and apathy towards this sector. Also, Indian Railways is running basically on social cause with minimum aim of earning profit. In 2015-16 the revenue generated was $26 billion of which the freight revenue was 17billion US $ and the contribution made by passenger was just 6.9 billion US $. The lower fare and various exemptions in fare given to senior citizens, students, Member of Parliament, sportsman and people with disabilities are causing Indian railways to compromise on its profit. This societal obligation is making Indian railways to bear a loss of nearly 23 paisa per passenger/km which amounted the reported loss of 300 billion ($4.7 billion) by end of March 2014.  China Railway Corporation in 2013 had Y605 billion revenue which was 14.1% more than 2012. 

 Indian railway is also the world’s eighth biggest employer employing 1.33 million people on the other hand China Railway Corporation has 2.184 million workers in 2013. Because of this overload the railway tracks and wagons get little time for maintenance making it more vulnerable to accidents. 

On comparing both countries it is observed that load on Indian railways is unbeatable because of the huge population and lesser area so is on China…. What makes China Railways more competitive and progressive in last few decades? The answer is very prominently related to the investment in the sector by government and the Research and Development focused on improving and maintain the industry standards.  In 2014, 130.4 billion $ were invested in China Railways which made possible for it to double its 50.8% tracks and to electrify 58.3% of its railway tracks. By 2015 it had built 9000km of new railway. It is because of the huge investment and systematic research plan that China railways had managed to increase its passenger traffic to seven fold and freight traffic to 5 folds from a period of 1980-2013. 

What has made China to grow its rail network 5 times in last six decades? There are certain management lessons which we could learn from China related to operational and financial working of railways.

Chinese railway operates in more businesslike manner where they have five main corporations each for railway construction, rolling stock, material and goods, signaling and civil. Chinese government also issue stick to attract foreign investors. Up to 2000kms railway authorities encourage local authorities to construct and operate their own railways. In China the railways follow surge pricing for controlling demand and earning better profits. Since, in India the revenue earned from passenger fare is quite low, defined surge pricing can be helpful.  

To meet the growing demand the Chinese government is making huge investments in rolling stock and infrastructure. On the other hand Indian railways has surplus cash of just 110 million $ which is even insufficient to complete its various projects. By 2020 India plans to invest 140 million $ in railways which is almost equal to what China invest in a single year.

Of 68525 km of route length in India, 45% is electrified and 37% are double or multiple route lines with 13313 passenger train running daily at a speed of 50.9km/hr. China is running its trains at minimum of 100km/hr speed and long distance trains at a speed of 300km/hr, something which India is only trying to achieve.

China is member of UIC and is involved in various initiatives for promoting the integration of railway network across Europe and Asia. China is running dual gauge trains to various international destinations like Russia, Mongolia, North Korea, Kazakhstan. It has also proposed to reach various far reaching international destinations like Russian far East, Southeast Asia, South Asia, Central Asia, middle east and even North America. With these seamless plans it would be appropriate to learn how China managed to mobilize funding in rail sector from various sources other than government. Earlier this year India has signed agreement with Japan on rail safety. In the last two years India has worked out a number of cooperative agreements with China for the development of railways. Indian engineers are taking training in China in heavy hauling also China is helping India in building Railway University. Both the countries have also agreed upon exchange of technical inputs for increasing the speed on existing railway lines from Chennai to Mysore via Bangalore.

(Prasoon Sharma is a fellow at India Global, a think tank formed by US and UK-based Indians)