The Gist of Yojana: January 2016

The Gist of Yojana: January 2016

Transport Infrastructure: Way Forward

The trend in transport demand profile in India has been characterised by an increasing share of road transport and increasing share of personalised transport (especially the motorised two wheeler). While the road infrastructure based facilitation of road transport, especially in the 2000-2007 period (NHDP and PMGSY), would have most certainly contributed to the jump in GDP growth, the impact on energy and environment and
safety would be far from desirable. It is important to reverse the trend of increasing market share of road and personalised transport towards more environment friendly transport modes like rail and water.

Transport demand can at the first level, be categorised into international and domestic movement (including for export/import). Ports and airports are the gateways for the export/import traffic. We first examine domestic movement and then international.

At the next level, the transport demand can be categorised into freight and passenger. There are no clear estimates on the relative value, effort or environmental impact of the two domains. However, examining the data of Indian Railways from a revenue perspective, about 70 per cent of the economic value is generated from freight. Similarly, 80 per cent or interregional road movement would be accounted for by freight vehicles as per toll booth information.

The National Transport Development Policy Committee (NTDPC) has tried to estimate the overall freight traffic until

2031-32, using a growth rate of 1.2 times the GDP growth rate. This multiplier is questionable, both based on past traffic growth, which has not exceeded the GDP’ growth rate, and given that India has about 60 per cent service.

Increasing rail share would not come easy unlessthe important aspects of customer orientation and capacity enhancement are addressed. The right direction tor this would be to increase separation between infrastructure and services, with services coming under structures that can be more market oriented, including, if need be, through competition and privatization.

Customer orientation was attempted in opening up container services to the private sector. The experience has not been as anticipated. There are lessons to be learnt in terms of clearly defining the roles of the authority who is also the infrastructure provider and the service provider. Appropriate oversight mechanisms in the form of a commercial regulator would be required. There are huge opportunities to improve customer orientation in the passenger domain.

Capacity enhancements in rail need to come both from additional modernized infrastructure, like the dedicated freight corridors, as well as extracting more. from the existing network. There is a lot of opportunity in the second approach through improved signaling and infrastructure to debottleneck junctions.

In the context of passenger, increasing speeds by a quantum jump for interregional movement is essential. While increasing speeds on the existing right of way can be an option, the benefits derived would not be substantial since it would be under mixed traffic conditions. Dedicate high speed corridors would be the way to go. Apart from being a game changer in terms of connectivity, this would also enable significant technology spin-offs.

The PPP route of road development should continue to be emphasized with appropriate viability gap funding, and land acquisition and environmental clearances, being provided by the government. In terms of financing may help if land acquisition costs are with the government.

The trucking sector nee.ds due support by the biggest concern of frontline ‘corruption’ arid harassment by various regulatory authorities being addressed. Other commercial deterrents like driver availability, roadside facilities, dual licensing of power ‘cabs and trailers, and electronic tolling, need immediate attention.

India’s record on road safety is amongst the poorest in the world. Better road engineering and furniture, and driver training and licensing, should be emphasised. This should be complemented by roadside support for emergency assistance. While there is sensitivity on these services, implementation could be better. The recent initiative to have tree plantations on the land adjacent to highways need caution. As per many international studies, trees are the biggest killers during accidents. This is specially significant. when we are trying to increase the average speeds on the roads.

From an environmental perspective, there is opportunity to increase the share of coastal transport, given India’s long coastline. However, issues of hinterland connectivity, cabotage, customs, taxation and duties, and berth availability in the larger ports, have held back the usage of this mode. There have been recent initiatives at easing the policy regime and encouraging coastal transportation. The potential shippers and service providers would need greater consistency in policy, with even subsidy based incentivisation in the early years to build the market.

Aviation has been growing reasonably, with the ‘open skies’ policy for the airlines. Non AAI (including private) involvement in the airports has been stopped after six airports. There are a: large number of airports which are not profit making. There could be significant potential in increasing their revenues through non aeronautical sources, with appropriate market orientation. Whether AAI should play the role of actually being involved in development and delivery or just oversight to bring in commercial players is an important question. In any case, an essential air services fund to promote smaller aircrafts would be important.

Aviation needs attention on improved safety at world class levels. Our safety standards and the regulation behind them have come in for international notice as being inadequate. A related issue is whether the air navigation services should be separated from airport management of the AAI, not only to provide focus, but also to ensure that there is no conflict of interest between navigation and airport management which has players other than AAI.

Transport infrastructure development needs a good regulatory framework. Such regulation must address licensing, environmental impact, safety, security, pricing, service levels and dispute resolution. If in any domain, competition is significant, then pricing and service levels would not need regulation. Not all modes have the appropriate regulatory framework.

Given the above, I would like to conclude that the directions for transport infrastructure development should be driven by speed with sustainability, safety, security, and stresslessness. I would call this the five ‘S’s of transport infrastructure development.

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