| Project Detail |
The technical assistance (TA) aims to help increase railways modal share in India by (i) reviewing the existing tariff policy in the Indian Railways, (ii) developing policy reforms to enhance domestic container traffic and parcel traffic through railways, (iii) developing a strategy to introduce semi-high-speed and high-speed trains on selected routes, (iv) developing capacity to collect market intelligence on competing modes of transport, and (v) supporting the Ministry of Railways (MOR) in strengthening its business development units (BDU).
Project Name Decarbonizing Transport in India by Increasing Modal Share of Railways in Passenger and Freight Traffic
Project Number 57027-001
Country / Economy India
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
The technical assistance (TA) aims to help increase railways modal share in India by (i) reviewing the existing tariff policy in the Indian Railways, (ii) developing policy reforms to enhance domestic container traffic and parcel traffic through railways, (iii) developing a strategy to introduce semi-high-speed and high-speed trains on selected routes, (iv) developing capacity to collect market intelligence on competing modes of transport, and (v) supporting the Ministry of Railways (MOR) in strengthening its business development units (BDU).
Project Rationale and Linkage to Country/Regional Strategy
The Indian Railways carries about 1.4 billion tons of freight and has a modal share of 27% both in tonnage terms and ton-mile terms, as per the National Rail Plan. In line with the national priority to reduce logistics costs from about 13%-15% of gross domestic product to less than 10%, it is imperative that a higher share of cargo moves on rail.
In 2020, the MOR set up BDUs in all the zones of Indian Railways to attract new traffic and to increase rails share of freight transport. The capacity of the BDUs needs to be strengthened with respect to the methodology for (i) collecting data on supply chains of various commodities, (ii) determining and forecasting the share of goods in various commodity categories that can be transported by rail, (iii) developing appropriate marketing strategies to divert traffic from road to rail, and (iv) gathering market intelligence regarding competing modes of transport. The workflow of proposals being generated by BDUs at the zonal level, being approved at the Railway Board level, and subsequently being implemented at the zonal and divisional levels, needs to be streamlined and made efficient.
Implementing appropriate policies and revisions in the tariff structure of railways is another essential factor that would play a role in increasing railways modal share. Currently, the tariff structure of Indian Railways is mostly static and does not change dynamically based on the route or time of year. The TA will focus on this important aspect.
At the 2021 United Nations Climate Change Conference, India committed to reduce emissions intensity of gross domestic product by 45% by 2030 from its 2005 level. Compared to roads, railways consume 75%-90% less energy for freight traffic and 5%-21% less energy for passenger traffic. Rail transport emits 17-gram carbon dioxide (CO2) equivalent per passenger-km compared to 84-gram per passenger-km for road transport. Rail transport emits 28-gram CO2 equivalent per net ton-km as compared with 64-gram per net ton-km in the case of road transport. Increasing railways modal share will contribute significantly to climate change mitigation and will assist India in reducing emissions intensity. The TA supports Indias international climate change commitments, including alignment with the Paris Agreement.
Impact
Railway modal share in India improved |
