The Future of Rail
Opportunities for energy and the environment
IEA 2019. All rights reserved.
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High-speed rail can play an important role in India. As salaries rise, the value of time spent in |
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transit is set to increase, making it important to provide fast options on medium and |
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long-distance trips. Due to the lack of high-speed rail and the availability of low cost airlines, the |
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number of passengers travelling by air in India, in recent years, has increased at one of the |
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highest rates in the world (Business today, 2018; ICAO, 2018). The realisation of MAHSR will |
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support a limited shift of journey from aviation to high-speed rail and there is the potential for |
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more. |
IEA 2019. All rights reserved.
Freight rail
In 2017, Indian Railways carried approximately 1.1 billion tonnes of goods and realised an overall level of freight activity of 620 billion tonne-kilometres (Indian Railways, 2018b). Coal haulage accounts for about 40% of the freight transported today, on a tonne-kilometre basis (Indian Railways, 2018b). In addition to coal, iron ore and cement are key commodities carried by the railways. These three commodities combined account for about 70% of total freight carried (Figure 4.3).
Figure 4.3 Transport of bulk commodities by Indian Railways, 2017
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11% |
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Coal |
2% |
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Iron ore |
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4% |
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4% |
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Cement |
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Food grains |
5% |
1 106 Mt |
48% |
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Iron and steel |
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4% |
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Mineral oils |
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9% |
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Fertilisers |
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Limestone and dolomite |
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13% |
Others |
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Source: IEA based on Indian Railways (2018b).
Key message • Coal is the dominant good transported by the freight rail system.
Most coal carried by railways in India is to supply power plants: 340 Mt of the total 574 Mt of coal transported by rail in 2016 (Kamboj and Tongia, 2018). In recent years, while the total volume of coal moved by rail has continued to grow (albeit at a slower rate than in the past), the average distances that this coal is moved have declined.8 Given the important role of coal in the commodity basket carried by Indian Railways, this has led to a decline in total rail freight activity (in terms of tonne-kilometres). While there are a large number of reasons for this reduction in rail freight traffic, two stand out:
•The coal linkage rationalisation realised by the Ministry of Coal, Ministry of Power and the Ministry of Railways to make the coal supply chain more efficient and to cut costs (Ministry of Coal, 2017).
•The construction of new coal-fired power plants close to the eastern region (where coal is produced) and near coastal areas (where import centres are located). In the past, coal was
8 The slower rate of growth of coal is due to the overcapacity of coal power plants and an increasing penetration of renewables for power generation.
IEA 2019. All rights reserved.
The Future of Rail
Opportunities for energy and the environment
transported long distances, mostly from the east to the north of the country, where the majority of coal-fired power plants are located. However, as renewable power capacity has expanded and the price of coal increased (partially due to increasing tariffs of freight rail transport), the coal power plants located far from coal mines have been dispatched less often. They are not likely to be retrofitted (Kamboj and Tongia, 2018).
In India, in contrast to most other countries (other than the United States), rail remains a Page | 139 significant mode of freight transport, accounting for approximately 30% of total surface freight movements in 2017 (i.e. excluding maritime transport) (IEA, 2018a). Though this share has
decreased from about 41% in 2000, as road-based transport has captured a larger share of growth in the freight market. Indian Railways has become largely a bulk commodity carrier, although even this traffic has increasingly shifted to road in recent years (Planning Commission, 2014; Indian Railways, 2018b).
Several concurrent factors have contributed to the reduction of rail’s share in freight transport:
•Capacity constraints in the railway network (NTDPC, 2014).
•Insufficient integration of other services into the rail supply chains: namely, first-mile and last-mile linkages. This highlights the need for logistical hubs and intermodal service providers (NTDPC, 2014).
•Expansion of the road infrastructure and adoption of multi-axle trucks (which carry higher loads and thus achieve lower costs per weight unit and offer more flexibility and convenience) (Planning Commission, 2014).
•Increasing freight rail tariffs (Kamboj and Tongia, 2018).
Indian Railways attempted to offset the reduction of revenues from decreasing freight traffic by increasing freight tariffs, especially those for moving coal.
Dedicated freight corridors
To increase the competitiveness and improve the prospects for increasing the modal share of rail in freight transport, Indian Railways is building two DFCs: one (the Eastern Corridor) connects Dankuni (in West Bengal) and Ludhiana (in Punjab), and the other (the Western Corridor) links JNPT (the port near Mumbai) with Delhi. Such DFCs are particularly important considering the high level of congestion on these routes (DFCCIL, 2018). Moreover, given that the highways along these corridors carry 40% of total national road freight movements (Planning Commission, 2014), the potential for shifting traffic from road to rail is significant. The mean traffic through the Eastern DFC is expected to be coal going to the coal-fired power plants located in the north of the country from coal fields located in the east.9 The Western DFC is mainly intended to carry containers from the ports on the west coast to the north and to carry coal, cement and iron and steel in the other direction. Both DFC projects are expected to be completed by the end of 2020 (DFCCIL, 2018). Once completed, the DFCs will provide two main benefits to the Indian Railways network:
• They will be able to carry longer freight trains, with higher loads and higher speeds (Pillai,
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2018). 10 |
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9 The Easter DFC ends at Dankuni, which is far from Kolkata port and from the city centre where most freight originates or is |
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off-loaded. The authorities concerned are well aware of the need to pay attention to the integration of the Eastern DFC into |
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the logistics of West Bengal and Kolkata. |
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In 2016, the average speed of diesel and electric broad gauge freight trains was approximately 23 kilometres per hour |
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2019. |
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(Indian Railways, 2018b). The Planning Commission estimates that on DFCs, freight trains could reduce transit times and |
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achieve maximum speeds of 100 kilometres per hour (Planning Commission, 2014). |
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