As Railways Hits Highest-Ever Operating Ratio, Rae Bareli Accident Underscores Gaps in Safety

The national transporter’s inability to generate surplus funds has direct consequences for safety.

New Delhi: Even as expenditure outpaces earnings at the Indian Railways, the derailment of New Farakka Express at Rae Bareli, which claimed seven lives, exposes the work still that remains to be done on the safety front.

Currently, the national transporter has set a record-high operating ratio of 117.31% – which means it spent Rs 117.31 to generate every Rs 100.

This higher ratio is reflective of both lower growth in traffic against set targets and heavy outgo on account of increased pension liability and working expenses.

Higher salary bills and expenses are directly tied to the issue of safety: at last count, the national transporter is yet to fill over 1.41 lakh vacancies of non-gazetted staff in various safety categories. According to a recent Business Standard report, these include 26,502 vacancies of assistant loco pilots and technicians and 62,907 vacancies of various Level-1 posts, mainly in safety categories.

On October 10, seven people died and around 30 people were injured after a nine coaches including the engine of the Delhi-bound train derailed near the Harchandpur railway station in Uttar Pradesh early morning on October 10.

Whether it was due to signal failure or track defects – which would be ascertained only after the inquiry of the Commissioner Railway Safety – the fact remains that there have been 31 derailments in the first five months of this fiscal compared to 29 in the same period last year.

This slight increase is the first blemish on the Narendra Modi government’s track record of safety, in which the number of accidents and related deaths have come down between 2015 and 2017.

In internal reports and discussions, the railways has claimed that the number of ‘consequential train accidents’ declined by 5.1% so far in this fiscal  as compared to the same period in the last financial year.

Also read: Top Posts in Railways Lie Vacant, Even as Policy Reform Slows Down

Railways data also showcased the comparison between UPA and NDA by stating that the average number of consequential train accidents was 171.1 per year, whereas the average number of consequential train accidents is 101.3 from 2014 onwards.

The data prepared by railways points out that for the first time in 2017-18, accidents recorded in a year were below 100.

Besides it has also highlighted its track renewal record with the figure in 2017-18 of 4,405 km and in the current financial year till September a renewal of 2,262 km to prevent rail fracture.  

But notwithstanding the data, the fact remains that derailments are happening on regular basis and on October 10, seven lives were lost due to the mishap.

While lakhs of passengers opt to travel daily on trains avoiding costly airfares, derailment of train due to track failure or signal fault put their lives at great risk.

The government has already earmarked Rs 20,000 crore a year under railway safety fund to strengthen tracks and for other requirements to prevent accident.

But how much of this can be sustained on the financial front, with a sky-rocketing operating ratio? 

An operating ratio is a gauge of operational efficiency that measures expenses as a proportion of revenue. It indicates the organisation’s operating expenses divided by its operating revenues, which helps to check its performance.

A higher ratio in railways indicates less ability to generate surplus funds that could be used for capital investments such as laying new lines and deploying more coaches.

Facing stiff competition from other modes of transport in carrying people and freight, the Railways earned Rs 25,591.62 crore from passengers against a target of Rs 26,110.69 crore in the first six months of the current fiscal, according to the internal data put together by the Railways’ finance wing.

Railways’ goods earnings were also below the budget projection during April-September 2018 at Rs 53,614.87 crore as against the target of Rs 57,412.63 crore.

The total earnings of the Railways for the current fiscal ending September is Rs 834,25.49 crore against the target of Rs 90,903.91 crore.

Working expenses have exceeded the budget projection for the April-September period – the Railways incurred Rs 79,151.83 crore as ordinary working expenses against the target of Rs 75,993.74 crore.

According to railways, besides the working expenses, there are other expenditures which are causing operating ratio to exceed the target.

 The huge pension liability, expenditure of Railway Board and railway institutions apart from the ordinary working expense which has far exceeded the total incomes during April-September 2018 resulting in operating ratio touching 117.31.

However, railways official maintain that this period considered to be a lean phase for traffic and typically operating ratio improves in the last quarter of a financial year with high hopes on freight earnings with an estimated increase of 51 million tonnes in 2018-19.

The operating ratio has been hovering above 90% for the last five or six years.

For the whole of the financial year 2018-19, the operating ratio is estimated at 92.8% as against 96% in 2017-18.

Arun Kumar Das can be contacted at akdas2005@gmail.com.