Abstract

This case discusses the turnaround of Indian Railways (IR) since it had been facing several challenges such as huge underinvestment, congestion, lack of modernization, unhygienic platforms and railway tracks, and frequent accidents. Over the years, several expert committees had made recommendations for improving the working of IR. However, the public utility continued to face problems. In light of these problems, the government of India had articulated its vision for improving the infrastructure, increasing railway lines, replacing toilets with bio-toilets for improving hygiene, enhancing safety, developing bullet trains – a network of high speed metros that connected the major metropolitan cities – and developing dedicated freight corridors. The Ministry of Railways was also planning to redevelop 400 railway stations through private participation. According to the Ministry, while the consumers would benefit in terms of upgraded facilities, these moves would help IR save resources. In December 2015, railways minister, Suresh Prabhu (Prabhu) announced a five-year plan model to turn IR around. Under the plan, Prabhu would address key issues plaguing the sector – improving traffic management and upgrading rail roller shops, the quality of railway platforms, cleanliness, and customer satisfaction. To de-congest the network and speed up the trains, IR was planning to spend substantial amounts on doubling of tracks and constructing new lines. While Prabhu was making attempts to revive IR, it was reported that for the nine months ended December 2015, the Railways’ revenue growth had decreased to 5.9 percent compared to 11 percent to 13 percent in the fiscal years of 2013 and 2014. The decrease was attributable to lower freight and a drop in freight volumes by 0.9 percent in December. Experts felt that Prabhu faced an uphill task in turning IR around and making it into a world class rail service.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze whether the turnaround around plan would help Indian Railways tackle its several challenges.
• Understand how IR would tackle challenges related to lower freight and drop in freight volumes.

Keywords

Indian Railways ,Turnaround,Railway infrastructure ,Passenger traffic ,Freight tariffs ,Modernization ,Bio-toilets ,Bullet trains ,Bibek Debroy committee ,Privatization,Infrastructure,Railroad,Traffic Management,Public Utility,Safety,Freight Corridors