10 December 2007

The Great Indian Railways Turnaround !!!!

Most people have no concept about how prodigiously rich the Railway system in India is in terms of its assets - land, the permanent way (the tracks), the station and station buildings, the rolling stock (locomotives, coaches and wagons) and the overall goodwill.

But the financial sheets always said otherwise. With its revenue slipping further and further, it was a pain for every govt. in office.

That’s where Lalu took charge. In two years, he has tripled the revenue to Rs 14293 crore – the highest ever rise. To put this number in perspective, it is India’s second highest profit maker, after ONGC’s Rs 15,143 crore. WHAT A TURNAROUND!!


“Milk the cow fully”.

Yes this is the LALU mantra for success. So simple, isn’t it?? Have a look…

What Lalu did was to plan exploitation of the railway assets to their optimum level and thus effectively "milking" them for the benefit of the society.

For example, let us consider the case of a superfast express trains hauled by an electric locomotive. Normally, the 5000 Horse Power WAP-4 electric locomotives haul these trains which are capable of hauling 23 or even 24 coach trains at speeds of even 140 kph. So far, 21 coaches were considered to the maximum load for these locomotives. For various reasons, including the absence of long enough platforms at stations where these trains halt, the loads of these trains have been kept down.

Orders were issued to lengthen the platforms. So, a train of this type would carry three more coaches per train meaning almost 200 more fare-paying passengers per train and making it more paying.
Some excess expenditure has to be incurred for higher fuel consumption - electricity in this case - but the extra earnings would far outweigh this small increase in investment.

The decision taken in 2006 to convert a large number of ordinary express trains into superfast express trains did help the Railways garner more money because fares for all classes in these trains are higher.
The Domino effect: Higher speed meant lesser time to traverse distances, leading to higher availability of coaches. So, without spending money on building new coaches - this is proceeding as per plan of course- the Railways got more coaches to run additional services or run longer trains with 23 or 24 coaches.

Lalu gave the mantra of his success at his Budget speech –

“This record breaking performance has been possible through reduction in wagon turn round time and through additional loading of 4 to 6 tonnes per wagon. This is the foundation of our financial turn around".
That is,

With two axles each per bogie, wagons now have four axles, which determine the maximum loads these eight-wheeled "bogie" wagons can carry.

The load per axle has been of the order of 18 tonnes so far.

Lalu has decided to increase the load per axle by one to two tones resulting in additional loading of four to eight tones per wagon, leading to overall increase in loading without incurring much additional expenditure. The same principle of reducing unit cost of operations.

This has enabled an increase of 100 mt. (metric tonnes) in our loading capacity and generation of over Rs.5000 crores in freight revenues. So simple!!!

However, he and the Railways are aware that wagons designs have to be changed with higher axle load capacity for sustaining this incremental carrying capacity. So, he has introduced
23-tonne per axle capacity wagons and work has already started at the Amritsar workshop.

(sources:G. Raghuram,IIM A, report on Indian Railways)


  1. That was very informative indeed...wonder why the earlier ministers were not able to think of such innovative idea...

  2. loading the wagon with excess load will only reudce their life..a short term gain might turn into a future disaster!!!

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