Playing with India's infrastructure

Businessworld

Ashok V Desai

The Prime Minister is keen on infrastructure. He has created a celestial committee on it to hasten matters. This committee created a daughter committee in June 2005. That committee was to meditate on the Delhi-Bombay and Delhi-Calcutta freight corridors. Why these two? A coastal corridor linking all the ports from Bhuj through Tuticorin to Paradeep would have made more sense; so would have a Bombay-Calcutta corridor, going through relatively undeveloped central India. The corridors were created for the aggrandizement of Delhi.

Corridor is a fancy name for a railway line dedicated to freight. Why not passengers? Because they have votes, so they cannot be made to pay an economic price. Lifeless goods are more paying. And if the same line carries passengers and freight, passengers get priority, and timely freight delivery cannot be ensured.

The decision to exclude passengers rules out upgrading of the present Western Railways line, and requires a new, parallel line. Will it serve the present stations? It may diverge here and there, but it cannot avoid major cities like Baroda and Ahmedabad. So really, there will be one straight, fast, streamlined line for freight and another winding, slow, crowded line for passengers.

Elsewhere, railways make money by transporting passengers at high speeds. Here, because the passenger has votes, he gets the bullock cart service while goods whiz past.

Who will own the new line? It will be a joint venture of Indian Railways and public enterprises such as the oil companies. Why the latter? Because they can be made to cough up the money and will ask no questions in case things go wrong. Above all, there will be no private financiers and shareholders, for they would want returns and ask questions.

The joint venture will own the track, but not the trains that run on it; they would belong to the Railways. But the separation of track and rolling stock has failed elsewhere, notably in England; there, Railtrack went bankrupt and had to be taken over by the government. Why try the failed model in India? Because the railways do not want to pay for the track, but will not allow others to carry the traffic, which earns money. The government does not have the guts to take on the million railway employees.

Who will build the line? The Japanese. Why them? Because the Prime Minister and the Japanese get on very well together; and the Japanese are flush with money and would be prepared to give long-term loans. Why are loans necessary if the public enterprises are going to put up the capital? Because they hate to have to invest in a railway on which they will have no control and which will make no money for them, and so they will put up as little capital as they can get away with.

The Japanese are great at building and running shinkansen, the rapid passenger trains. Their freight technology is not great. Why then were they asked to build a freight corridor? Because the Prime Minister loves them. The Germans, who are champion freight carriers, do not fancy working with the Indian government.

The Delhi-Bombay corridor may make sense at least part of the way; but why the Delhi-Calcutta corridor through the robber-infested badlands of UP and Bihar? Because Buddhadev Bhattacharjee (the Communist Chief Minister of West Bengal) has done the Prime Minister favours, and they have to be repaid. No matter if it costs an additional Rs 200 billion; no matter that it will definitely make losses.

It does not matter to the Government of India, which has easy access to the taxpayer’s pocket; but it does to the Japanese, for if the Delhi-Calcutta corridor does badly, they will lose face. So they are balking. No matter; the government will approach another government for building the Delhi-Calcutta corridor.

And will not the Delhi-Bombay corridor pass through Gujarat and Rajasthan, and do terrible injustice to Madhya Pradesh? That is precisely what Kamal Nath is saying; and he has clout. So the corridor may soon meander off into the Chambal ravines!