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Subject: General Studies (Paper 3 - Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management)

Topic: Infrastructure: Energy , Ports, Roads, Airports, Railways

INFRASTRUCTURE: ENERGY , PORTS, ROADS, AIRPORTS, RAILWAYS

IMPROVING TRANSPORT INFRASTRUCTURE

The Indian government is engaged in major improvements to the quality of transport services and infrastructure. This is critical not only to realize India’s economic potential, but also to lift the overall quality of life. The transport system has faced difficulties keeping up with the rising demand and this now sets back economic development.

The government is addressing these shortcomings with major public investments and reforms have allowed for greater private sector involvement. Such framework conditions were first used for the telecommunications, airlines and ports sectors, and more recently highways and airports where benefits are now visible. In contrast, where the private sector was absent, investment stagnated and difficulties were recurrent, as in the case of railways which are overloaded and under funded. Accordingly, the next five year plan (2012-17) is built on doubling the overall rate of investment in transport infrastructure, half of which will be financed by the private sector.

ROAD TRANSPORT

The growth of motorized traffic has outstripped the capacity of road infrastructure and traffic management systems. In many rural areas economic expansion is severely constrained by the poor quality of roads and the inadequate and unsafe highway system. A standardized public private partnership (PPP) contract has been introduced for highway construction and as a result, the proportion of roads financed by the private sector and the rate at which new roads have been completed has soared since the mid-2000s (Figure 1). However, construction companies are now highly leveraged and the capacity to take on more projects may be waning. As growth moderates, it will be important to monitor the performance of existing PPPs so that any necessary contract renegotiation is addressed in an orderly and proactive manner. A t the same time the government should persist with the reform of land titling and land record management in order to reduce land acquisition delays.

Improved public transport can help reduce green house gases, while providing an affordable alternative to private transportation, where higher fuel prices, taxes or subsidy withdrawal may result in higher prices. An illustration of this is the Bus Rapid Transit Systems (started in Ahmedabad) which has enticed many passengers to switch from private vehicles or minibuses, reducing both travel time and emissions. Public transportation is important because even if car use has been rising with the increase in revenues, average incomes are only a quarter of the level at which car ownership usually takes off. Overall car ownership remains low, at less than 2 per 100 people (against 45 in OECD Europe and Japan). The majority of people continue to depend on walking, cycling or public transport for their commute to work, and also to access basic services. They are faced with unfavorable 17 conditions for public transport and increasing risk for pedestrians and cyclists exposed to poorly regulated motorized traffic. Investment in urban roads needs to therefore incorporate facilities for walking, cycling and prioritized public transport if these infrastructures are to benefit most of society.

Fatalities and injuries caused by traffic accidents have become a major public health concern in India with the growing levels of motorization (Figure 2). Submission to Parliament of the revised National Road Safety & Traffic Management Board Bill, initially tabled in 2010, is a priority. So is adoption of the Sundar Committee on road safety and traffic management recommendations in India’s 12th Five Year Plan. In the meantime, enforcement of existing road traffic safety regulations also needs to be improved. Enforcement of speed limits in particular would be effective in saving lives, with speed limits being adapted to the quality of infrastructure and mix of users.

RAILWAYS

Rail transport is critical to the Indian economy. Sizeable investment is underway in trunk routes for freight, serving ports and industrial centers, however funding appears unsustainable over the longer term. Capacity is surpassed for both freight and passengers, resulting in poor service quality. Resources remain inadequate for maintenance and expansion of the infrastructure to meet its steadily growing demand.

The fundamental cause for the imbalance is the channeling of resources from profitable freight carriage to the support of  low, government- controlled tariffs, and loss-making passenger services which inflate demand and deprive freight of  resources for investment. Tariff reform is politically difficult but unavoidable. Profitable freight business will be lost to the roads as the road capacity grows and rail freight service reliability declines. This in turn will erode the funds available to maintain the cross-subsidy to passenger transport. However, if low prices for certain services and types of passengers are to be maintained, a system needs to be introduced, where compensation is paid by the government to the rail ways for running politically mandated loss-making services. This will require accounting reform and the establishment of a regulatory agency to arbitrate decisions in place of the current practice of setting tariffs as part of an annual budget.

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