RE S T RI C T E D

Report No.'.0-143a

This report was prenared fnr use within the Bank. in making it 1available to others, the Bank assumes no responsibility to them fortile accufacy or compieteness of the information contained herein.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

TECHNICAL REPORT

ON THE

INDIAN RAILWAYS' FIVE YEAR PLAN

INDIA

July 1, 1957

Department of T echnical Operations

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fTTDTD T'NTCV TnTTTI aT .NTCTT_ S V S I - S*_. .

1 U.S. Dollar = 4.76 Indian rupees

1 Indian rupee * 21 U.S. cents

. $ 100,000 Rs. 476,000

Rs. 100,000 $ 21,000

*YrF1'rA IT Tl A irT WA itrC n~ThT\1^nf.LL'U.LLIt1V 11K±LLMA1 ztr~rllJU

Table of Contents

Pag

Summary and Conclusions i - iv

I Introduction 1II Consultants 1

III Indian Railways 2A. History and Organization 2B I Management 3C. ManDower 3D. Property hF. Traffic Volume h GomDos1tsT? 6F. Rate Structure 7G. Finannres and Earnings 8

H. Operational Efficiency 10T TTea Pf VreviousmLco T.ran 11

IV Investment Programs 12a. General Background of First and Second

Five Year Plans 12b. Railways' First Five Year Plan: Objectives

and Results 12c. Railways' Second Five Year Plan 13

i. Physical 14i 0 Scope of the Second Five Year Plan 19

iii. Plan Cost 21

iv. Foreign Exchange Requirements 21v. Finanngi-n of the Plan 21

vi. Procurement and '.lethod of Procurement 22vii. Electrification omn.pared with Dieselization 23

viii. Railways and Road Development 25Sound-ess of the Plnn 26

V. Bank!s praricipat.0n .i .na-Jng the Plan26

v-hibit 4 1. Railway 1- _of Tnda-

" 2 Financial Results 1952/53 - 1956/573 Swmmary of Selected Operatin.g Statistics:Br"ad Gauge LinesL Requirements of Rolling Stock (Except Electric) and Age of

EquipmentII 5 Line Capacity Torks-Double Trackingi" 6 Outline rap-Electriftied Track and Source of Power" 7 Financial Forecast through Period of Second Five-Year Plannt 8 position of Railways Funds 1955/56 - 1960/1l

9 Comparison of Operating Costs of Locomotives - Bhusaval toIgatpuri

REPORT ON THF. INDIAN RA1 'AYS

SUMJARY AND CONCLIJSIONS

The Government of India has requested the Bank to assist in fi-nancing the Second Five Year Plan, 1956/57 - 1960/61. This report is anappraisal of the Indian Railways and the railway part of that Plan whichis expected to cost approximately Rs 11.25 billion (equivalent to U.S.$2,362 million) and to increase the transport capacity 47 million tons by 1961.The report is basea on information obtained from the Railways by the Bankand by Coverdale and Colpitts, consulting engineers, who spent four weeksin India as the Bank's consultants.

WVith the exception of a few narrowr guage lines, all the railwaysin India are vwholly owned and operated by the Central Government. Theycomprise seven zonal systems totalling 34,183 route miles= Foliohv ng Arethe main subjects of this report.

Management

The Indian Railwayst Board members are men of great ability andtheir staff is of a high standard. The general managers of the zonal sys-tems have broad experience and though there are weak members in their staffs,the general level of competence is high. There appears to be an ample sup-ply of managerial talent within the Railways to fill top jobs in the future.The management, as now constituted, is capable of carrying out the indianRailways' part of the Second Five Year Plan.

Under the existing rules for compulsory retirement at the ageof 55, all the present members and additional members of the Board andthe general managers of six of the zonal railway systems will reach retire-ment before completion of the Plan in 1961. The retirement of so manyexecutives within so short a time could be serious in such a critical per-iod for the railways.

There is no evidence of political interference in the operationof the Indian Railways.

Property

The condition of roadway is good but the Railways lack capacityto handle present and future traffic. The bridges,designed for lighterloads. and we-akened by age. are inadeouate for the loads now possible.

Equipment is in good condition; in spite of the large proportionthat is over-age. The property in general attests the high-quality main-tenance performed by the lways, and it provioes a souand basis upon whichto proceed with the Second Five Year Plan.

Profitability of Operation

The Railways have consistently had a net surplus to appropriateto *^1"AO of+.=" mmm Ana HonVtnim Atn *nL 24S%Jnd nbin the i-vidend

to general revenues on the Government1s investment, as represented by thecapit. '-1 c u g-. .- - r 4^.- A.- r d a.s tha +'m.L;+t be appred.

by the Government, on the recommendation of the Special Commission whichis stud-ylg this subJect, rlo 'd, .de the presen+ cor.J;+ions, produce~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~arAr h peen on.-

additional net revenue for the Railways.

Operational Efficiency

Operations are adversely affected by the restriction of axle-loadsto 24 tons, the use of the link coupler, and by the differences oT gaugewhen transshipment is necessary. The axle-load limitation is being met by thesubstitution of double-truck four-axle cars for two-axle cars for freight,and the use of either diesel or electric locomotives where such use is justi-fied by the traffic. A transition automatic coupler is being designed topermit the use of the link coupler vwith the automatic coupler. Little canbe done about the differences of gauge, except for relatively short-distanceconversions of congested connecting lines, for which some provision is madein the Second Five Year Plan.

Nothwithstanding these conditions, the operations are efficient,though the average speed of freight trains has declined and passenger trainon-time performance has fallen. These deficiencies are a manifestationof lack of line and vard caracity to handle trains. Complaints about slow-ness of movement and difficulty in obtaining cars for loading are symptomsof tha smam ailmhant and the shortage of' eq_p-ment.

ly56757 -7590771

The Plan is principally directed to increasing the capacity ofthe RailwJay to hn.dle additional tra'fTfi c. Its mos 't elema nt_sare the acquisition of new rolling stock, the doubling of main-line tracks,--provements 4.: yara.d a.snA A e4S i8A doesel=

ization of some main-line services, and a further important developmentin motive power is electri-fcatLon of ce-ain- vey. high density passen,gerand freight traffic areas.

The Plan originally prepared by the Ministry of Railways calledfor an outlay of Rs 14.08 billion 'equivalent to U.S. $3,108 million) andenvisaged an increase of 66 million freight tons in the capacity of theRailways by the end of the Five Year Plan. The Plan was, however, cutback to Rs 11.25 billion (equivalent to U.S. $2,362 million, of which theforeign currency is estimated at U.S. $892.50 million equivalent), mainlybecause of India's shortage of financial resources. On the basis of thisreduced amount, the Railways expect to increase capacity to handle anadditional 47 million tons by 1961, but since the overall Plan, if carried

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out, is expected to generate an additional 66 million tons, there is seri-

ous question of the adequacy of the railway program.

The Consultants have urged that the items increasing capacitywhich were removed from the Railways' original program should be rein-stated. They estimate that to restore these items and to provide for a10% overall increase in prices would cost Rs 3.25 billion (eouivalent to

U.S. $682.5 miLlion) and would raise the total for the Plan to Rs 14.5 billion

(equivalent to U.S. 83,045 million). The Railways, acting in consultationwith the Planning Commission, are considering additional capacity vrorks,though not of the above magnitude, and approval has been given for additional

electrification in the industrial area west of Calcutta. The cost of suchadditional works is to be met from increased funds from Railroad resources,

resulting from a higher surcharge on freight traffic to be made effectivejl y, 1957*

It is epxn ted; therefore, that the gap between 47 and 66 milliontons will be reduced. Furthermore, analysis of Indian financial and techni-cal resources for the overal plan ind…icates that it is more likely to take

at least six years rather than five to complete. In such case, completion

of th;e Railways program in five yea><, which iJs the intentions might enablecapacity to keep pace with growing demand.

The cost estimate of Rs 11.25 billion (U.S. $2,362 million) is

divided as to sources between the Indiar Goverrent, RI 7.;5 W;'lir 4(eq va-lent to U.S. $1,575 million), and the Railvways, Rs 3.75 billion (equiva-lent to U.S. $787.5 million), out the Railways now eapecut to provide Rs

4.85 billion (equivalent to U.S. $1,018 million), making the grand totalRs 12.35 billion (equivalent to U.S. $2,593 million).

Electrification Compared with Dieselization

The use of either diesel or electric motive power is requiredon lines around the large cities, especially Bombay and Calcutta where com-

muter traffic is already dense and increasing, and on certain main lineswith very heavy freight traffic. The decision to electrify over 1,000

miles of line to meet these conditions is based primarily upon the ready

availabil±lty of eleetrie nower at reasonable Cost, which makes this form

of transportation cheaper than diesel.

Railways and Road Development

Road transport has been neglected in the past. There are stilla number of missing links in the main trunk roads and many of the exist-ing bridges are too weak to carry heavy trucks. A considerable extensionand improvement of the road system would. therefore. be needed before roadtransport could compete with railways over long distances. Over short dis-

tances, the main obstacles lie less in road conditions than other factors,such as vehicle licensing restrictions. These obstacles are being dealtrith by the Central GAvernment and in. ue tte1ycr -ronai transnort can be ex-

pected to increase its share of passenger and freight traffic.

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The om rr.n ofP Tr,;ahs en lfstk---+UdJlL.g for some imie th p-ob

lem of effective coordination between rail, road, and sea transport. Suchstudies can, however, have little bearn on the ralway ±vestment programin the Second Five Year Plan, which is directed to urgent needs to meetimm-ediate requirements. The heaivier investment in railways rather than inhighways and road transport equipment, or other forms of transport, iswterefore justified.

RECONiCENDATIONS

It is recommended that consideration be given to a dank Loan ofQgo million for foreign purchases of locomotives and rolling-stock (includingboilers, underframes and wheelsets), spare parts, and other railway materialsand equipment.

In view of the nature of the Plan and the period for its execution,a term of fifteen years would appear to be appropriate, including a graceperiod of four years. The Borrower would be the Government of India.

REPORT ON THE INDIAN RAILWAYS

I. INTRODUCTION

l. The G^vernnent nf India has renuested the Bank to assist in financingthe Second Five Year Plan. This report is an appraisal of the Indian Railways

and the railway part of that plan A great deal of the infornation on which

it is based was obtained in meetings with Railviays' officers and by observa-

t..-L%on of opertion.s ir the field by the Bk'S …onsultants, ltessrs. Coverdale

& Colpitts. Substantial information was also supplied by the Indian Railways'

Delegations which visited the BanK in November 195f6 and May/Tune 1957. The

Bank has considered the Consultants, report and is in general agreement with

the findings.

!I. CONS U-A.aoS

2. In their terms of reference, the Consultants were asked to appraise:

1) The authority, povwers and efficiency of the IndianRailwayst Board.

2) The organization and efficiency of the Eotanagement,the caliber of its personnel, and its capacitytoplan and execute the Second Five Year Plan.

3) The over-all soundness of the Plan.

L) The efficiency of the Railways' operations.

5) The condition of track,. rolling stock and rail-way facilities, their maintenance and their pro-posed improvement under the plan.

6) The present rate structure in its broader -aspectsand the possibilities of increasing revenues, inthe l.ight of the findinas of the special onmmis-sion appointed by the Indian Government.

7) The present financial situation of the Pai)ways,the sounness of their finaancial policies, the ar-rangements for financing the Plan and the expectedfinancial results.

3. The Consultants' group, consisting of M!r. Slater, partner and trans-

portation specialist,, Mr. Burgess, partner and civil engineer, 14r. Roeder,

mechanical engineer, and 1r. Joedicke, transportation economits, spent about

four weeks in India during February 1957. They had full discussions with the

Railway Board and its staff, which has overall administrative responsibility

for the Indian Railways, and with the general manager and staffs of six of

the seven railway systems making up the Indian Railways. The group travelled4,000 miles by rail inspecting railway properties, including important yards,workshops, staff quarters and training schools, and observing operations. They

also visited the ports of Bombay and Calcutta, the Chittaranjan Locomotive

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Works and the Tntegral Coach Factory. In addition, they discussed railwayoperations and problems with chiefs of 1-inistries. heads of major industries,and other representative business people vwho could give the vieewpoint of userson the competence of the Railways' management.

The Railways' Second Five Year Plan was prepared by the Tndian RailwXaysBoard and managements. The Board engaged the firm of Sanderson & Pcrter, NewVYrk ir. Feb-ir 195A, +n maLk v20Aus studies of some of the measures needed

to increase the capacity of the Railways. The firm presented a preliminaryreport in July, 956, which was m.ade available to +he nDn.k end the ConultantsOn the basis of the preliminary report, they are making further studies inreference to: - the faci Lties required in the Bengal and Bihar area to handlethe greater coal output; increasing the tractive efficiency and power of goodssteam locomotives; designing a transition type automaUsc coupler; and, the in-troduction of centralized traffic control as l"pilot" projects on selected sec-tions of heavily travelled lines. They are also studying the coordination ofmovements of coal, iron ore and other traffic between the railways and coastalshipping. The results of these studies would not change the basic elements ofthe Railways' Second Five Year Plan.

III. INDIAN RAILMAYS

A. History and Organization

5. The Railways of India were built largely by private British capitalin the second half of the 19th and early 20th centuries, with the Governmentguaranteeing a fixed return on the capital invested and reserving to itselfextensive powers of supervision and control. All the important private com-panies wvere bought out by the Government of India during the period of Britishrule, and were integrated with the railwvays of the princely states in 1950-51.With the exception of a fevf narrow gauge lines, all railways in India are nowwholly ovmed and operated by the Central Goverrment.

6, The Indian Railways are under the jurisdiction of the Minister ofRailways who is a member of the Cabinet, Administrative responsibility for theRailways rests with a Board consisting of five members: A chairman (who is amechaniral engineer); a financial commissioner, and members responsible respec-tively for civil engineering, personnel, and transportation. To assist theBoard wifth the 'Tre _Mrn+. nfo worke it has to do, five "additional", members

have been appointed.

7. The Board's staff is divided on functional lines, with a director and/orjoint direector responsible for each m ajor ph-ase of railv wy amini stration oractivity.

8. The railway companies which were' combined to form the Indian Railwayswere consolidated, after the reallocation of certain lines, into seven zonalrailway systems, as follows:

Central Railway Southern RailwayEastern Railway South.Eastern RailwayNorthern Railway Western RailwayNorth Eastern Railway

9. A railway map of India is attached as Exhibit 1.

10. Each system is headed by a general manager who is responsible to the

Board for day-to-day operations, and is assisted by a small staff divided

on functional lines. The railway systems vary somewhat in organization but

the divisional form. has been largely adopted and all the systems will even-

tually be organized along divisional lines.

11. In addition to the railways, the Minister of Railways is responsible forthe Chitt-aranjan Loti've V"orks (in the Damodar Valley) and the IntegralCoach Factory, Vadras.

B. Ifanagement

12. The members of the Railway Board are appointed by the Minister of Rail-ways, subject to the concurrence of the Prime Miu nister, In the case of theFinancial Commissioner, the approval of the Miinister of Finance is also re-quired. Except for the Financial Commissioner, all the present mrembers of the

Board have long railway experience. Three have been general managers of zonalrailway systems, and the fourth was the manager of the Chittaranjan LocomotiveWorks,one of the most successful projects carried out in the First Five Year

Plan. The present Financial Commissioner comes from the Finance Ministry and

has wide government experience and great ability.

13. Although the members of the Cabinet and the Parliament undoubtedlyexercise considerable influence in such matters of policy as the level of rates

and fares, there is every indication that the Board has full authority over the

Pailways, subject to ccntrol only on such policy matters as those mentioned and

the budget. There is no evidence of political interference in the operation

of the Railways.

14. The quality of the top railway executives is impressive. The Board-

members are men of outstanding ability and many 'of their staff have already

achieved outstanding railway success and promise to go far in railway adminis-tration. On the individual railway sTstems there apnears to be more varia-

tion in ability. The general managers are men of broad experience and provensuccess but their staffs include some weak members, However, the general

level of competence is high, and there appears to be an ample reservoir for the

fili'ng of +op Jobs - the future.

A matter for concern, however, is the possible effects of the nresentpolicy requiring compulsory retirement at the age of 55. All the presentmembers and additionalembmbers of the Board and the general managprs of six

of the railway systems will reach that age before the completion of the Second

Five Year Plan in 1961. The removal of so large a nuWmber…of top officialsdifficult enough for any organization to bear, seems particularly hazardous in

a period so critical for the railways as the rnext fi4ve years.

C. lean Power

16. Employment on the Indian Pailwvays is very high in relation to units of

traffic handled, As of March 31, 1956, there vwere slightly over one million

employees on the railways, excluding persons employed in the Chittaranjan Loco-

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motive Works and various construction projects.For 1955-56, this was equivalentto one employee for each 74,4oo units of traffic handled (adding passenger-miles and ton-miles) compared with one employee for each 635,300 units of traf-fic on class I railroads mi the United States in 1955. The disparity is not sc.marked in a comparison with seven Western European countries for which the aver-age in 1955 was 122,000 units per employee.

17. These differences arise out of the general differences betveen high-wage,highly capitalized economies and a low-wage economy such as the Indian, in whichthe replacement of labor by capital is often uneconomical. The total payrollof the Indian Railwvays in 1955-56 of Rs. 1,h61 million amounted to only 46.2 per-cent of total operating revenues, compared with 49., percent for Class I railwaysin the United States in 1955.

1R. The management of thp Tndian RailvwavA annpars, moreover- to hp enc singeffective control over employment. Between March 31, 1952 and Larch 31, 1956, em-plnyment increased only 10.0 percent, compared with an inorease of iR percent inorigirnating goods tonnage handled.

19. The more serious problem on the railways, as indeed in all other indus-t":_ _:_ :_ _ries 4 A_: .,_rs 4. h;' _L Ind"a, ; Va g .1 _t-4

cated by the large numnber of training programs being carried on. programs fortraining skilled muechanlics and sui rvisory perso.nel are bdLng conducted at theChittaranjan Locomotive Works, the Integral Coach Factory, in the workshops,at individual railway heauquarters, and alorg the lines. Schools also el.st forthose who are to work at stations and in various capacities for the transporta-tion departments. Five schools were visited and favorable notes taken of thecare with which each was conducted, the seriousness of the students, and thenumber successfully completing the courses. For most higher supervisory positions,a university training is desired though not mandatory, and most people on theheadquarters staffs and in supervisory positions on the lines appeared to havecollege degrees.

D. Property

20. As of Mfarch 31, 1956, the Railways consisted of 3h,183 route miles and48,611 miles of track. The system is multi-gauge (h7% of the route miles arebroad-gauge; 42% meter gauge, and the balance narrow gauge) and all three gaugesare found in virtually every part of the country, although there is a particularconcentration of meter gauge on the North Eastern, Western and Southern Railways.

21. The following table shows the distribution of route mileage by railwaysystem and gauge, as of March 31, 1956: -

N.G.2t-0ttRailway B.G.56" M.G.3'3-3/8" to 2t6t? Total

Central 4L,o95 - 772 767 5,63Eastern 1230h 17 2,321Northern 4,172 2,006 162 6,340Nor+h Es r 2 1,751 52 h,805Southern 1,807 4,160 96 6,o63Slouthl Eater 1. -7 925 3,399

Western 1,289 3,615 717 5,621

Total 16,143 15,304 2,736 34,183

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22. Additional breakdons Of rOutle andu track mleage by gauge a1nimportant classifications are given belovw:

Route miles by gauge and lines:

Broad Meter NarrowGauge Gauge Gauge Total

Single line 13,005 15,213 2,735 30,953Double, treble,

etc.lines 3,138 92 - 3,230

Total Route Mileage 16,113 15,305 2,735 34,183

Track miles by gauge and class of track:

Running track 19X634 15,h33 2,7hO 37,807Yards and sidings 7,132 3,340 332 1l0,8OL

Total track mileage 26.766 18.773 3,072 48,611

23. Tn arddition tn the track. the Pailwavs' fixed assets includeabout 6,000 stations, railway workshops, staff quarters, hospitals, train-inrg schools, etc., as ella the Chittaranian Locomotive Vrorks and theIntegral Coach Factory.

24. On the 2,000 miles of broad gauge lines inspected, the quality4_ 41 1-y"J _ _v Acoc ulnT:- anotL Thp Pnpral

standard on the broad gauge main lines is 90 pound rail, which is esti-mated to be capable of carr:yng are loads of 22.5 tons with baQ1tand ties of current specifications. Bridges, originally designed for muchiighter loads, and weakened by age, would be inadequate to cary the loadsimposed by new larger steam locomotives and heavier freight car axle-loadings.

25. The composition of the rolling stock, by type and gauge as of March

31, 1956 was as follows:

Type of Equipment Broad Gauge pbeter Gauge Narrow Gauge Total

Locomotives 5,790 2,966 416 9,172Rail and electriccars 161 87 23 -271Passenger cars 11,956 9,816 1,383 23,155Freight cars 164,32h 65,551 -5,323 235,198Railway service ve-

hicles 4,501 2,002 112 6,615

Total 186,732 80,422 7,257 27LhL411

26. Of the total number of units of eauipment, 68% are broad gauge,294 meter gauge and 3I narrow gauge. However, the division of freightcars, which make up 86% of all units of equipment, corresponds very closelyto the division Of tons of freight carried and net ton-miles among rail-ways of the three different gauges. The Railways' equipment is thus fair-

3--11 tk!3I-n%eoe4 An fho liaht. of nP;>ds-

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27= mhp condition of the equipment is good considering tnat the numberof over-age units is very large. The increase in traffic generated by thefirst Fisre Vear PlAn during the period 1941-q6, accentuated the problemof over-age equipment (over 40 years old) by compelling the retention inservice of units which --rouid otherwise have been retired. On the broad

gauge lines, over-age locomotives increased from 23 to 33'; cf' t.e tot..lbet-ween 1951 and 1956 and over-age freght cars f rom 13 to 177!

28. Th shopscu-. ngi hoses ir.spected were *,.;ell laidl out and

clean.

E. Traffic Volume and Composition

29. Between 1951/52 and 1955/56, the total volume of freight originatedincreased by 187 from 96.6 million tons to ll1 million tons and the nu-n-ber of freight ton miles from 2e,966 million to 36,458 million. In bothcases, the upward movement vwas accentuated in the last two years of' theFirst Five Year Plan. Passenger traffic has increased slightly between1952/53 and 1955/56 by 2,155 million passenger miles (5.8'7).

30. The improvement for freight noted in the above years has beencontinued at an accelerated pace in 1956/57 with a 10 increase in origi-nating tonnage over the previous year, according to the 1.:inister of Rail-wayst recent budget message to Parliament.

31. A breakdown of revenue-earning freight traffic originated by classof product in the year ending March 31, 1956 is given below:

Products: of agriculture 16,584,POOn U animals - 403,000tt " mines 35,855,000

Mineral oils 3.323.000Products of forests 3,479,000Msanufa6tures 1313,1',000Miscellaneous 17,429,000Vilitar- traffic 530,000

Total traffic origin-ated 90;737?000 tons

32. The largs t sangle class of traffic handled is products of mines,

mostly coal and ores, which constitute almost 40% of total traffic orig-intated. The relative importance of this type of e traffic ma2y be expected

to increase even further during the Second Five Year Plan period as aresult of T-he planned iLncreases in stee' production from new .and expwandedplants and in iron ore exports.

33. I.anufactures and miscellaneous products make up about 30% of thetotal. This class of traffic has grown more rapidly than to'al traffic;between 1951/52 and 1955/56 it increased by 38%S compared with an increaseof 21% in total traffic, and from 1954/5h to 1955/56 alone it increasedby 15% compared with an increase of slightly under 9% in total traffic.It seems probable that this type of traffic will continue to increasemore rapidly than others.

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34i. Although India is predominantly an agricultural ccuntry, a largepart of the products of agriculture are still consumed locally, andtherefore this category constitutes only 20y of total tonnage originat-ing.

35. In addition to the 90.737,100 tons of revenue traffic originat-ing on the Railwmays in 1955/56, 1,223,000 tons were received from for-eign railviays, esneciallv from Pakistan- Non-revenue traffic. largelvcompany coal, amounted to 23,323,000 tons. Total revenue and non-revenuetraffic carried thus amiounted tfo ll5,283flflf0 fns or q.mPwhat under theestimate of 120 million tons for the end of the First Five Year Plan.

36. Data on total passengers carried in 1955/56, broken down betweenell an a nn..-su,`b,b-bn yand bP_t,V,reen& th+ird cl.ass an"d all othe-r c-lasse1s,are given below:

Passengers - suburban 499,123,800- 7n"O -1-1 a* -NPL-subuLrbaU-u 1 (7Qu)U( {(Uu

Total l,297T,3,i500

passengers - All classes except third 35,99l,LUoThird-class 1,261,41[0,loo

Total 1,297,431,500

37. Almost 40% of the passengers carried were suburban and about97% of all passengers carried travelled third class. The average haulper suburban passenger is 10.2 miles, and for non-suburban, 42.6 miles.

38. The problem of passenger traffic congestion is most serious aroundthe large cities of Calcutta, iKadras and Bombay; Delhi is not far be-hind. The need to increase capacity around these large cities by elec-trification or some equally satisfactory alternative was one of the majorproblems considered in the studies for the Second Five Year Plan.

F. Rate Structure

39. The present freight rate structure which became effective on Oc-tober 1, 1948 provides three types of freight rates:

1) Most commodities, including most manufactures,move at "tclass rates" which are the hihqhzht ofthe three types of rates in force. CommoditiesMnTVincr:1. +.Tioaa -r +n+. o-r- ARitr;r1A Jrl+n IC% e0newcaat thseraes aze diie intand within each class there is a further subdivi-sion, nnnn'.A4nge, ler.n+1 o. haul,a

4 ~ ann., s .epar+

scales of up to 300 miles, of 301 to 600 miles,-dL ov-er %6VU Li.Les.

2) Most of thLue rem,a-LILr,O braffc2...L irc.lud-g.U sjuch

bulk commodities as animal feeds, limestone,commionl ores, grains ewt., moves at somewVat loVVer

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"carload rates." There are 13 scales of suchrates, with a separate anditional scale fnr conal

3) The low!est rates in force are the "station.-t^-station rates" which apply to specific commodi-ti es n,.or'a n.. be+:enn,enn,f pp^tic s+a~+ionsc ;hrrer there

is a substantial volume of such traffic.

I0. Most rates have a maximum charge calculated on a haul of about 1,500milesXa ,.&, excep in the case ofL vh= ImLCJVIp-ino hecrodrts The lat=

ter are generally excepted from the maximum because the rate per mile becomeslow Lfor long-haul movements. P.igh va±lue commoU.L±Les are QaVLUe av lim=edrailway risk. A lower rate exists for some commodities when moved at "ovmer'srisk.'!

41. In addition to these haulage charges, freight traffic is subject tocertain fixed charges for terminal loading and unloading, for short distancemovements (less than 75 miles), for transshipment for changes of gauge orriver ferry movement, and a 6-1/4% surcharge on total charges for all freighttraffic except grain, fodders and manures, which has been in effect for l.c.l.traffic since April 1, 1955, and for all traffic, wfith the indicated exceptions,since April 1, 1956. In addition a 3% surcharge was introduced in 1956 for"lexpress goods servicelt on certain main routes. The surcharge is refunded ifdelivery is not made within the scheduled time.

42. Effective July 1, 1957 the Railways will place an additional surchargeof 6-1/LU on freight traffic, making the total surcharge l2i% on all suchtraffic except grains, fodders and manures.

43. There are four basic rate scales for passenger traffic:

1) Air conditioned

3) Second class) hi^-4d c'-Iss

llt. Second and third class rates are frt+her subdivided according to vheth-er travel is by mail or express trains or by ordinary passenger trains. Like+he fri.o.+ class- ra+es, r"'-p-aa err ra+e ar n …a1te esoic -… si… , -ith three

distance scales: 1-150 miles, 151-300 miles,, and over 300 miles; monthly andquartler]'y UILC&UbK al U ZiU±U LU L- OUUUs Udu1 U .W auu wzLt; C: ;>pt:w Im"es

for the Bombay, Calcutta and Madras areas where special suburban trains areoperated. Concessional round-trip fares are prVoVtded du.-iri Opecial holidayperiods.

45. A Special Commission appointed in June 1955 has been examining therate structure and its report is expected shortly.

G. Finances and Earnings

46. The Railwvays are a state-owned enterprise, with finances separate fromthe Government General Finances since 1924. The Government is the sole out-side source of capital. Its contribution vYhich is known as the capital-at-charge is about Rs. 10 billion at present. The annual rate of dividend payable

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by the Railways to Government General Revenues on the capital-at-charge is 4%(a slightly lower rate being applied to part of the investment) as recommendedby a committee of the Houses of Parliament and approved by them in 1954. TheRailways pay no taxes on earnings.

47. Additions and betterments are financed mainly by capital-at-charge,but in part also by the Railways, from the Railways Development Fund, whichis fed from net surplus, and, for certain types of capital expenditures, bycharges to operating expenses or to the Depreciation Reserve Fund. Itemscharged directly to operating expenses under the miscellaneous expense accountcalled Open Line Works-Revenue include smaller projects for "Labor Wlelfare"'or for other purposes which in the main are not considered remunerative. Alarge part of the expenditures under this account, which varied between Rs. 40million and Rs. 60 million between 1952-53 and 1955-56, and amounted to aboutRs. 100 tillion in 1956-57, would be properly charged to capital under moreconventional svstems of accounting.

4R. The provrison for depreciatvion is based on the anticipated cost ofsuch replacements as it is decided should be made, including improvements atc,, .v.,., nA s^., aar.d prces, n- -A on + t-I- v-, a lu,, of th ' ir.g 4 prot n-~ LJ. U±t SJ O.LJ.LO.,U~ ~fM~ -.%L .'..' ~ ~ £A J U .I U±L~ VO. LA 14 U41O ~d.LQ U.Ll,r WiJ . Lt

4VJ Jt

be retired. Thus the annual credits to the Depreciation Reserve Fund, whichnow amount to" P 450 , rVaprese;-n estimate of the currenrt cost ofneeded replacements.

49. Payment of the dividend on capital-at-charge is backed by the RevenueReserve Fund, wnich nas received eacn year the net surplus over and above ap-propriations to the Development Fund. A review of railway income in recentyears shows no charges against this Fund which amounted to Rs. 468.9 millionon April 1, 1956.

50. All Railway Funds are deposited with the Government which pays intereston the balances at the rate for the current year; the current rate is 3.3%.

51. There is not a balance sheet in the usual accounting sense. TheRailways deposit their surplus in the Reserve Funds. From the balance sheetpoint of view, therefore, the most important itemrs are the fixed and floating(stores) assets, as represented by the capital-at-charge and charges to theReserve Funds, and the balances in these Funds.

52. A summary statement given below of financial results since 1948-49,the first year after partition, shows a record of consistent surpluses afterpayment of tle required dividend on capital-at-charge. Since 1953-54, theannual surplus credited to Reserves has risen from Rs. 26 million to anestimated Rs. 236 million, in spite of the substantial increase in depreciation.

Estimated(M;l ior1 Re) .g48/J9 i5 l9<n/ 1 (0 /E3 'A IQr-/J 1, i5/56 1_96_57Capital-at-

Oharoge 6,946 8,196 8,5Th 8,693 9,016 9,690 1,7Gross Receipts 2,J56 2,630 2,706 2,743 2,868 3,163 3,506EX-penses 1,620 1 4 A'i. 1, 93 2,7 7 2 12'7 210 231.)I

Depreciation 13 300 300 300 300 450 450

Dividend to CentraluoVL.. uene~rd.J

Revenues 297 325 329 332 339 350 377Net Surplus Credited

to Reserves 126 151 132 26 91 142 236

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53. The findings of the Special Commission which has been studying thera+eV~ ~ * ~4 VA n' - n^+u aa -but1 ar. g increase of rate --

sulting from their recommendations vwould, under present conditions, further±UUmprove the financial positU0LnLLUk o the UL L YQ.

>.- I L,r d t _l -J s'ate rfien't of f -irancial results 'or the last --e earsSh.0 A more de'ai'.eu U L 'e ui~u 1. J. -±u L.~ L. L~~i .1L ul LL 0 v J.

is given in Exhibit 2.

H. Operational Efficiency

§55 Three physical characteristics of the Railways seriously limit theircapacity and ability to operate efficiently: a) the limitation of existingbridge and track structures to axle-loads of 222 tons; b) the use of thelink coupler instead of the automatic coupler; and c) the differences ofgauge, when there is transshipment.

56. The transfer of loads from cars of one gauge to cars of another neces-sarily slows up freight movements, but is a less serious problem than it wouldbe in higher-wage colmtries. The high cost of standardizing gauges preventsprompt removal of this handicap, but certain contemplated changes in gauge andthe plan to construct a line betwieen Klandwa and Hingoli linking the metergauge railways of the northern and southern sections of the country shouldprovide a measure of relief.

57. TTnti1 a verv large number of bridges on the railway systems can berebuilt, the problem of axle-load limitation is being met, in part, throughthe nint rm-+jnn of bogaie trlnnks which nermit the utilization of freight carswith a capacity of as much as 65 tons. Little increase can be expected inaverage train. loads, vrhich wwere nder 1 _,0 gross tnns (a lnw figure comnaredwith American standards) or in number of cars per tain (less than 50 on theavTerage fLor IV g hi ah"Ld lca +ratjns 1-ewr ni1l e tric oYr r rbespl trac-

tion is substituted for steam which cannot be substantially increased in oper-atina po-ier uihut exceeding e-^Isti.g1, a 'we-load1 l!, ad until the

automatic coupler is brought into general use.* The large capacity cars of65 tons, and proposed new cars of 90 tons, are fitted Lith automatic couplersand are used in block trains transporting coal and ores.

58. The coupler problem is being rorked on by Sanderson & Porter, who havebeen asked to design a transition automatic coup'ler, andu the Lailvwys are also

studying the matter.

59. Despite these limitations, the Railways have been able to achievea steady increase in operating efficiency except in train speed. The improve-ment is reflected clearly in the operating statistics of the broad-gauge rail-ways, which handle 75% of all freight and passenger traffic. A table givingselected statistics for these railways appears in Exhibit 3.

60. In the five years from 1951-52 to 1955-56, net ton-miles of freightcarried increased by 23.5%. passenger-miles showed no significant change.This substantial increase in traffic volume has been handled through a betteruse of locomotives and cars, assisted by the additional rolling stock acquired

in this period. The average trainload increased frc= 922 to 988 gross tons;the percentages of loaded to total car-ailes from 69.5% to 71.9%, the number

* Reference is to the broad gauge lines.

of freight car-miles per freight car-day from ho.9 to 46.3, and the numberof engine-miles ner day ner engine on line fro-m 79 to Bit

61. Tn the same apr r - and denite the increase in the proport+ion ofover-age equipment in service, there was a significant improvement in theconAitio.n of -d,-.man* Fhe nar,=nn+ate ofieng afvairl4- 4 -e A -rsA

from 18.26 to 16.78, of freight cars Prom 7.40 to h.63, and of passenger carsfrom 13.41I+ 10.9 MUe aveag n-4 rer of- hot4- boxe permotnnot

freight and passenger service decreased oy about 8%.

62. In one important respect, however, there was a deterioration in per-formance during the period, a decline in average freight-train speed from10.7 miles to 9.8 miles per hour. In the opinion of the Consultants, supportedby the general managers of the individual railways, this decline, as well asthe rather poor on-time performance of the passenger trains, is due to trafficexceeding the present railway capacity. Data for the first eight months of1956-57 for several of the railway systems indicated a continued improvementin performance in all respects except freight train speeds which declinedeven further for reasons already set forth.

63. The improvement in general operating efficiency is confirmed by thefact that operating expenses have risen relatively less than traffic andrevenues.

*64. There is a sharp contrast betwieen the indications of efficiency de-rived from an analysis of operating statistics and the unfavorable opinionof railway performance expressed by shippers and travellers. There is gen-eral agreement among shippers that they must wait a long time for orders forcars to be filled (one firm has records of an average wait of 12 days): thatfreight deliveries are very slow; and that no information is available aboutfreight en route Passenger trains are not only overcrowded but often late.

6c_ T~The Pailwayst top managemnent cnniedes the justGice of these corplaints-It attributes them. to lack of capacity, and the indications are that the de-fense is justified. Shortages of freight cars-an-d overrrowded passengercars, and the speed restrictions on congested main lines that result in de-1yed freight deliveries an lm+e psg trains are 211 eviruenos of the

pressure of traffic on capacity that has already been cited as the cause ofthae decli;.e in frigt+ri speed inrece+ --rs .hs ho1oinsd+1-h.. ~~~~~ 4,-~_Q%A LL &V4 6U Y,- . L11 -1-A-not appear in general to be due to any failure on the part of the Railways touse avai'ble capaciy- as e4fA LiUn4 as psil.W

I. Use of ,Previous Loans

66. Te first Banik loan of .3h illion to India for r ifJ6y rehabiti

was made on August 18, 1949. In ITay 1950 an amount of 1-1.2 million, whichwas likely to remain unexpended, was cancelled at the request of the Borrower.The remainder, T'32.8 million, was used to purchase 418 locomotives, spareboilers and miscellaneous spare parts, to help remedy a serious lack of motivepower.

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IV. IfASTEMENT PROGBL25.7

a) General Background of First and SecondFive Year Plans

67. The First Indian Five Year Plan (1950/51 - 55/56) was prepared withthe emphasis placed on immediate priority problems. Planned expenditureswere Rs. 23.6 billion for the Dublic sector against actual exDenditures es-timated at Rs. 20 billion. Investment in the private sector was substantial.

68. The Plan targets for production were exceeded. National output pro-hahlv increased by 18%, c-pnnared with the 1& tvinca anmea at, o1utput+. per

head increased 9%, and real consumption per capita by about 7%. Although therateo ofF rov-rtlh 4-n agriculta+me wr_a s _slw~ t.h_n in+ t'- resof te_e_ +onoI- yr -- _- ' -s Ja.r .I. . v,ss -.Lf resi v. s;0 J. Uflvnv;.-. J ,

targets here, too, were surpassed with an increase of 20% in food grains. In-dus-trial. production rose 1- r.early 1C<

69. The Second [rLve Year PrIul Ls auimu atb cL1-i' L1 fUoVrU anU accelerat-ing the process of development, with emphasis on industrialization and diver-

"'Llcation of the economy. Planned expenditure in the publc sector 1ibillion and about half that amount in the private sector.

4'. The aim is to increase net national product by about 25%. Outputof food grains is to be raised from an estimated 63.4 million tons in 1955/to about 80 million tons in 1960/61, finished steel from 1.3 to 4.3 milliontons, iron ore from 4.3 million tons (in 1954) to 12.5 million tons, coalfrom 38 to 60 million tons, and cement from L.3 to 13 million tons.

71. The aims are ambitious in view of the financial resources and adminis-trative and technical personnel likely to be available. Because of these li-mitations the Bank F'ission to India in 1956, concluded that the Plan wouldtake nearer six years than five to complete. This was confirmed by the re-cent (MIarch 1957) Bank rission to India.

b) Railwayst First Five Year Plan:Objectives and Results

72 On the Railways, the beginning of the First Five Year Plan had beenpreceded by a decade of heavy, war and post-war traffic and shortages comuel-ling the deferral of maintenance, The plan had, therefore, to be devotedmainlv to tnp rphahilit-tinn and modrrni7ation nf rollinq stock and track

with special attention also to increasing passenger facilities and improvingst8qff housczing, Trn additi +Ar., a lcfn.erv- nl8t nn+ d ar rar anl. were con-

structed.

73. Planned and actual expenditures during the Plan period are shown below:

Plan Allocation ActualI Rs.;-il'ion)

Rolling stock,plant and machinery 2,079 2,534Track and bridges 705Coach & loco.factories, Ganga bridge, etc. t59 500Restoring dismantled lines,new lines & electi'caiUoi± 34 332Passenger amenities 150 133caf'f in,+t-o"Q and w Lfare wn-rL-a 2J1 205i-'iscelaaneous items 2h 27

Total h,321

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71. TnGr-na_t% in railway milhapce ciuirinp' the npriod included the restora-tion of 1430 miles of line dismantled during the war, the construction of 380miles of ne.r lines, and i-niation of thea 4 oin of anr aditional 14f5ifmiles of new lines.

75. About 50 miles of line were converted from narrow to meter gauge andanother 50 miles from narrow to broad gauge. Electrification of the Calcuttasuburban area was begun and the first phase is expected to be completed inl n

Yl) O.

76. Renewal of over-age and obsolete track was slovi because of shortagesof materials, but the mileage under speed restrictions due to poor track con-ditions has been reduced from 3,000 to 1,784 miles.

77. During the last years of the Plan period, greater attention was givento increased line capacity, with priority for a number of congested areas.Transshipment facilities vwere improved at nine busy interchange points.

c) Railways' Second Five Year Plan

78. The Railwrays' Second Five Year Plan provides for an expenditure ofRs. 11.25 billion to meet increases in traffic and improve somewhat the stan-dard of service. It assumes an increase of 47 million tons of freight (reve-nue and non-revenue) to 162 million tons by 1961 and an increase of 15% inpassenger train miles.

79. A breakdown of proposed expenditures is given below:

Millions of Rupees

Rolling Stock 3,800Track renewals lrnnnBridge works 330

1,~~~~~~~~~~1rRILeh1- ab-i';1"Jt a tior. 180-4lAGanga Bridge 9048i , LV& A';Ae,

Line capacity works including expansion of goods sheds 1,860Signalling a-nd safety works 250Electrification 800

New construction 660Staff welfare and staff quarters 500Stores depots 70TrainLng schools 30Railways' users amenities 150

Other projects including Vizagapatam port 150Railways' share in road transport undertakings 100Stores suspense 5oAmount provided for steel to be imported (outside

Equalization Pool) Loo

Total 11,250

i) Physical: A description of proposed additions and betterments in each

category listed is given below:

Rolling Stock

80 planned purchases of rolling stock, including purchases for replace-

ment, account for one-third of total Plan expenditures (Rs. 3,800) and are in

un-itsY as foL-LOWs:

nBroad Gauge M5eter Ganage Narrow Gauge Total

Loco.lotives 1,L30 853 81 2,36L

Passenger cars 6,156 4.,786 633 11,575Freight cars 8l,4I54! 21,772 L,021 107 ,2781. A rllore detailed st0atemert, broken dov.. in+o anc

is given in Exhibit 4.

82. In the case of locomotives, part of the increase in capacity required

is expected to be met through an improvementu in utilization, the electrJifca-tion of 826 miles of line, and a reduction in the percentage of locomotivesunder or avwaiting repairs. No improvement in performance or in the percen-tage of units in bad order is assumed in the case of passenger or freightcars, since the present maintenance is excellent.

83. The program is expected to result in some reduction in the percentage

of over-aged rolling stock in service. However, the program will require the

retention of all locomotives and freight cars with up to L5 years of serviceand of as many units in each class wvith over 45 years of service as vrere onthe line on MTarch 31, 1956. In the case of passenger cars, it implies re-

tention of all broad-gauge units with up to 34 years of service and allmeter-gauge units with up to 35 years of service.

The percentages of over-age units on the line in 1951 and 1956 and(estimated) in 1961, are shovn in Exhibit 4.

Track Renewals

R5, The nrnarmm provides for the renewal of 8,000 miles of track, compared

with an estimated requirement of 11,200 miles. Ninety and seventy-five poundrail wi11 be used on the broad gauge lines (9n# will be 90 nounds) and 60 and50 pound rails on the meter-gauge lines (about 2/3 will be 60 pounds).

86. Wood, steel, and cast iron ties will be installed, the quantity ofeachL to bu-e u9sed du %Jeper,dJing upor. t,he wraillabiluty of materials. ProposeOd Wn.ual re-

newals on the broad and meter gauge lines are as follows:

Type of Tie Broad Gauge Meter Gauge^^A t>housanzds)

Wj[ood 1,200 1500

Cast-iron 1,h50 500Steel 850 500

Bridge Torks

87. Over half of the expenditures on bridges will be made for the streng-thening of existing structures to enable them to carry heavler locomotivesand heavier freight-car axle-loads. In addition the Ganga River bridge willbe completed and new bridges, mainly on new lines and for double trackin- willbe built. WFork will begin on three important bridges, across the Brahmaputra,the Jumna and the Gandak Rivers.

Workshons, Plant and Machinery

88. Most of the shops now in use were in existence when the Railways wereacquired by the Government. To cope with the increase in rolling stock, a

number of workshops and running sheds will be remodeled and expanded, andnew shops built. The Plan provides for six new workshops, a new meter-gaugepassenger-car factory and the expansion of the Integral Coach Factory and the

Chittaranian Locomotive W'orks. Consideration is being given to the introduc-tion of multiple shifts in certain shop departments and to the initiation ofsystematic production control.

89= The increase in capacity for major overhauls is estimated at L5% for

locomotives, 105% for passenger cars and 100, for freight cars. The new andexpranded shops are designed so as to be adantable for the repair of types of

equipment not now in use, such as diesel-electric locomotives.

90- The capacity of the Integral Coach Factory, ultimately to rise to 350passenger cars per year, is expected to reach 200 early in the Plan period.Constructed for the manufacture of unfurnished passenger cars, facilities arebeing auded to produce furnished cars, of Lhich the manufacture has alreadybeen started. Locomotive production at Chittaranjan is to be increased to200 per year. Total production of passenger cars is expected to increase from

1,260 to 1,800 and of freight cars from 13,530 to about 25,000 per year, mostof which are produced by private enterprises.

Line Capacity Works'

91,, To meet the anticipated increase in demand for rail transport durigthe Plan period, line capacity must be increased by about 501. With that aimin view the Plan provides for the double tracking of 1,607 miles of broadgauge lines and the conversion of a section from meter to broad gauge. De-tails of the program are given in Exhibit 5.

92, Double tracking is to be concentrated on critical sections of thelines carrying coal from the West Bengal and Bihar coal fields, on the 500

miles between Khxargpur and Nagpur along t.hich three major steel plants willbe located (the existing Tata works, and two of the three new plants to beconstructed under the Second Five Year Plan) and on the main-lines Bombay-

Allahabad, Uadras-M,angalore and Bangalore, and Bombay-New Delhi. Conversionof the section from meter to broad gauge will permit through traffic on thebroad gauge line from Calcutta to destinations in South India to by-passMadras.

93. Provision is-included under this category also for the remodellingof a number of interchange yards, many of a-iihich have reached capacity on thebasis of present methods. Although some railways have a number of humpyards, flat switching is still necessary in many yards. Mioreover, a numberof yards cannot handle the longer trains that will come into use when auto-matic couplers have been installed and engines with higher motive power be-come available.

94. Major changes are therefore contemplated at a number of points, in-cluding Moghalsarai which is the largest and the most important in the sys-tem; Kanpur on the Northern Railway; Asansol and Ondal on the EasternRailway; Khargpur and Tatanagar, Rourkela and Bhilai on the South EasternRailway; Bezwada, Jalarpet, Erode and t1adras on the Southern Railway; Bhu-saval, Itarsi, Kalyan and others on the Central Railvway; and such points atUdhna, Baroda and Godhra on the Western Railway.

Signalling and Safety Works

95* Because the volume of traffic on the Railways is expected to con-tinue growing at a very high rate, provision for increased line capacity isbeing made nrincipallv through double tracking rather than through the instal-lation of Centralized Traffic Control. CTC has been considered as an alter-native to double tracking h_ut it cannot double canacitv and in the conditionof the Indian Railways it could in most instances only be a stop-gap.

96. The Plan includes provision for raising inter-locking standards topejLm.L higher speeds on main-tr--LLU6 rI utlCes; for introducJlng inte. okngo

sections of line where traffic has increased and in important yards; and for.Lntrou'ucin.g moderni po-wer signalling in bu'sy ya-rds, automlaiic si;gna""'irg oni[1LiOUU.LL~ H1U~L1 JJW~L .L~1d~.LLL ~.44 Jr y.L kO u ~IiL'. i.J14, 4

busy sections, modern signalling for hump yards, including automatic opera-tion for points and retarders at Moghalsarai, and CTC on tw-o sections. Pro-vision has been made also for safety works, including increased telecommunicationLacilities.

Electrification

97. The Plan includes provision for the electri-fication of 826 miles ofline in addition to the 2h4 miles already electrified. An outline map show-ing the areas affected is in EXhibit 6. About 65% of-the new electrifiedmileage, 552 miles, will be located in and around Calcutta which has had noelectriflication up to this time but on iich work has already started. Thiswill be the most heavily electrified area. Consideration is being given tothe electrification of an additional 587 miles around Calcutta for executionin a later plan. The concentration on this area is justified by the factsthat Calcutta is the largest city in India and that the area west of thecity includes the industrial zone for the manufacture of steel and relatedproducts and the production of coal and iron ore.

98. In the Bombay area which now has 226 miles of electrified line, anadditional 191 miles wrill be electrified. In the Eadras area, electrifiedmileage will be increased from 18 to loo miles.

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99 In all these areas, increased traffic demands make necessary the re-placement of steam povier by diesel or electric Dower to increase capacity.The relative advantages of diesel and electric power are discussed in great-er detail below. (Section IVc/vii). In general, electrification appearspreferable because of the availability of power at reasonable cost in all the areaswhere railway electrification is novw contemplated. With. the completion ofthexrmal plants burning low-grade coal and hydro plants nac under constructionin these areas. sufficient power for railway as well as industrial needs willbe available. The disadvantages attached to railway electrification are theinitial high investment and the fact that the bulk of expenditure would befor imported material. In the future, some of the material and equipment re-ouirpd will probably be produced in Tndia. but that will not be the case un-der the present Plan. The Railways estimate, however, that the contemplatedelectrification rwill yied PI return of 14 to 2C0(- on the canital recuired.

10G. Col tr-ar.sorted for ra lwa-ys use, amou.nting to rolghly7 12 million

tons in recent years should be reduced by the change from steam power onthese l;ines, nit 4 & ,4he con sequer.t re'lease of -car c-ap1acifty to% meet other needs .

idl. In the Calcutta and Bombay areas, the increase in capacity to bemade possible by electrification is recuired by the great increase in traffic.The population of Calcutta and its suuurban en7irons has increased from abouttwo million to about five million in the past 25 years. Because travel perhead has also increased, passenger traffic has increased even niore sharply.In the 15 years, 1938-39 to 1953-54, the number of suburban passengers car-ried on the Eastern Railways increased by 212% from 93,000 to 292,COO. Onthe basis of an analysis of population and traffic trends, the Indian Rail-ways forecast that suburban passengers carried on this Railwvay will doublein the next few years, with the number of passenger trains required increas-ing by 134%. On the suburban route Howrah-Khargpur on the South EasternRailway, suburban passenger train-miles are expected to increase by 170%and total passenger train miles by 117% in the ten years ending 1962-63.

102. On the route from Calcutta wvest to Gcmoh to be electrified, thegrowth in mineral and coal traffic is expected to increase freight and pas-senger traffic combined by 40%.

103. On the 191 mile section in the Bombay area which is to be electri-fied, it is anticipated that gross freight ton miles will increase by 117%and total train service by 46%.

10l. In the Madras area, additional electrification is Justified princi-pnallyr by the high cost of coal (179q higher than at Calcutta because of itsgreat distance from the coal fields) and the abundance of low-cost sourcesof -. elcO« poer.

'DieseLization

iG5. 'ome dieselization 's provi ded for on.main laes nL"eady cor.gested

because of heavy traffic and ruling grades or likely to become congested be-cause of prospective increases in traffic (rainly in the steel area). Orders

have been placed in the U.S. for 100 broad gauge diesels of 1,850 h.p. each.Twenty are expected to arrive in India this year with the balance scheduled

for delivery in the first half of 1958. The Railways already own 67 diesels

of very lov horsepnoer which are used mainly for swiitching.

_v n- J e s

1i. C-nstruction of' newr :Lrnes is limited to- 82 mile_ Of the total, 67

miles will be on the South Eastern Railway and almost entirely for the dev-pioFet ot he c , ore, ar.d steel areas. It vill include lines; such as

elopment of the coal, or,… 1n schathose between Karanpura-Barkakhana and Rourkela, Dumaro and Rourkela and be-tween B0hilai and Dalli Rajhar.a to bring coal and ore to the new mills, and125 miles in the Central India coalfields. On the Central Railways, a 175-mile

iLne is to be constru d ;n tL u i he area where thle Central and 'estern. Railaysconnect, to link Guna with Ujjain and provide an alternative route for coalmoving from the central coal field's to Bombay and the northwrest. The balance

of the new mileage consists of a 44 mile section on the Eastern ?ailway, a

100 mile section on the Northern Railway and two sections totalling 56 r'leson the North Eastern Railway.

107. The new lines to be constructed are essential either for the develcp-

ment of the coal and ore areas or to provide significant increases in capacity

in congested areas.

Staff W!elfare and Staff quarters

108. As the largest single employer in the country, the Railw;ays must make

substantial expenditures on employee welfare, which is given high priority

in their plans. Some Rs. 500 million is provided for staff quarters andamenities, including hospitals, dispensaries, etc. mainly for the 165,000emnloyees exnected to be added to the staff.

Stores Depots

1* A To faci±itate the various nrojects to be carried out, constructionstores depots will be established at suitable points. The overall invento-ries balance will be increased both to meet construction reouirements and thegenerally increased requirements of the expanded railway systems.

Training

I10. The training requirements of the new staff will be met through a

trengthening of exst4g training facilities and the establisshment of nineadditional schools. Facilities have in fact already been increased and fur-

ther expans-ion is underway. To mention a fewf -w.orks, the Staff TrainingCollege, Baroda, is being extended to accommodate 110 officers at a time,the facilities for subordinate staff at Udaipur have been comp.leted and a

technical school at Ajmes vwill open this year. Construction of schools has

started at Trichinopoly and Kargpur for protection staff, and civil engineer-ing training centers are being established for assistant inspectors of works,

draftsmen etc., also instructions have been issued for training in variousworkshops and running sheds.

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pailway Userst Amenities

111- Provision-is included in the Plan for further improvement of passengerstation facilities, which have already received same attention under the FirstFive Year Plan, and the Jmnrov7Pent of eP-zsting nassenger cars= To insure

the best use of the limited funds available for these purposes, the details_of the amenities to be supplied and the order of priorities for Aror 1 to beundertaken will be determined in consultation with the Rail Users? Consulta-U.i ve C orrmitt ees.

UOther ItemLs

. The remaining items in the program are an allo-wance of Rs. hOO mlllionfor imported steel, Rs. 100 million to enable the railwaysto participatein public road passenger undertakings to be set uD under the Road TransportCorporation Act of 1950, and Rs. 150 million for various projects includingthe provision of additional berths and handling facilities at the port ofVizagapatam, which it is hoped can be used increasingly to relieve Calcutta,especially in coal and ore handling. (since the Plan was drawn up responsi-bility for this port has been transferred from the Railways to the Mlinistryof Transport),

(ii) ScoDe of the Second Five Year Plan

113. The Second Five Year Plan for the railway described above which in-volves the expenditure of Rs. 11.25 billion, represents a cutback from the pro-

grams originally prepared by the Hiinistry of Rail ays which provided for anoutlay of Rs. 1L.8 billion. According to the Planning Commission, the reduc-tion was made after "taking into consideration foreign exchange requirements,uncertainties concern4ng the supply of steel, priorities within the railwayplan, and the clair;ms of other sectors.?' Although the requirements of increasedtraffic are stated to ave been the princinal Luidinz factor in determiningthe financial needs of the Railways, and the adjustments in the program weremade with a view to economizing capital exrenditure by substituting less formore expensive exiansion works, the new program only makes provision for atraffic increase of 7 mIllion tons as against the ai wa1y Board's estimateof an increase of 66 million tons in the Five Year Plan period.

Lll. The bulk of the reductions were, in fact, in expenditures for increas-ing capacity. The '-a+gest si ngle reduction .ras Jin milae, and large cuts

were made in expenditures for rolling stock, double-tracking, signalling, andelectrflIcation.

.l1>. iiThe reduc-tions are sh-iown- bevlow:

Rs. hillion

Locomotives and rolling stock 870Track and bridge renewals & rehabilitation 320Ganga bridge 10Line capacity works 290Signallin- 200Electrification 500?New T 4 tes 1;290

Other 0

3.520

- 20 -

116 There i no detailed iustification of the revision of the Railway

Boardts traffic estimates, made to meet the reduction in the amount to be

in.vested, &and a cr=c-u"ison of the two traffic estimates, shown below,

raises questions as to the realism of the revision.

Estimates of Additional TonnageMia,1way Board Plan MT77 comnission

(RAl.jjBllion_Plan)(Rs.11.25 Billion Plan)~~~[,- Xr_=n tons'

Coal 20 1e.<

Steel and Raw Materials forSteel Plants 18 18

Cement 5 4Railway materials other than

coal 1 1i41iscellaneous traffic 22 11.5

66 47.0

117. The largest single reduction in estimated traffic increases (10.5million tons out of a total of 19 million) is in miscellaneous traffic.However, as was pointed Olt above, this is the class of traffic that has

grown most rapidly in recent years and it may be unrealistic to assume that

it will stop growing more rapidly than other classes of freight, and that the

volume of traffic offered to the Railways will not exceed the figures assumed

in the revised Plan.

118. Failure to forecast and provide adequately for railway requirementsir the First Fre Year Plan resullted in a shortage of capacity (demand in1956 was estimated at as miuch as 5 million tons in excess of capacity) and to

the car shortages and delays in delvr SO generalU r omplained about inIndia today. The possibility that under the Second Five Year Plan transportcapacity may continue to "fa'l short of needs s na serios Oeakaess of the

Plan, since an inability of the Railways to meet traffic demands in full

would impede the completion of the overall Plan. The onsulltants have urLed

that the items increasing capacity which were removed from the original Plans.hould be reJinst44atled,

119. Tnas wea-1kU-es is r-ecogiLized a-L ..d t De -_la acX+e4t 'A sslato~LLJLJ. T U .1. ;CV J4~,G .. consl io

with the Planning Commission are considering additional works to those provided

for in the Rs. ii.25 billion Plan. The-y are repor-te( to hawve approved the

extension of electrification from Gomoh to Moghalsarai and from Asansol to

Rourkela, to serve the needs of heavy indus-try. Al thie additional workswould increase capacity, taking into account the most urgent needs as theydevelop with the progress of execution of the Plan and traffic incrementsand the availability of funds. It may be expected therefore that the in-

crease in transport capacity will fall between the two amounts of 4( and 66million tons.

120. It should also be noted that analysis of Indiani financial andtechnical resources for the overall Plan indicates that it is more likely to

take six or possibly seven years rather than five years to complete. If the

- 21 _

railway program is completed within five years, as intended, capacity maykeep pace with the growing demand.

iii.Plan Cost

121. The Railways? Plan was drafted using estimates of cost that wereconsidered to be realistic at the time but there has since been an advancein prices of equipment and materials, which may raise costs by about 10%.The exact percentage of increase is not lnown because procurement will takeplace over a period of several years and because in the case of steel, whichis a substantial nart of import purchases, an allowance was made in theestimate for price escalation. If, however, a full 10% is applied, thetotal cost of carrying out the RailwavsI Plan would increase from Es. 11.25billion to Rs. 12.37 billion. If those items removed from the original!Ls 1448 billion progranm which wp-re directed at increasing capacity (loco-motives and rolling stock, line capacity works, signalling, electrificationand track wvorks) were to be restored, the cost woilld rise to Rse 13225billion at the prices assumed in the original program and to about Es. 1h.5bla-112 or wit-h a "rlwj ir.crease.

v. F oreigr. EchangIMe RJi reme n-.s

122.~O thtue total est:L-iated Plan cos-t o-L rPs. '.5bil.lon., aboutIRs. 4.25 billion (U.S. $892.5 million equivalent) would be in foreigncurrencies. Foreign excnange ep-enditur-es would be as follows:

4IllIon U.S.lillion Rupees Eauivalent

Locomotives 810 170Other Rol-ling Stock 820 172Other Equipment 1250 262Steel 1370 288

v. Financing of the Plan

123. The Railvays were to provide Rs. 3.75 billion of the total of Rs.11.25 billion required, and the Government the balance of Rs. 7.5 billion.However, as a result of the increased surcharge on freight traffic whichbecormes effective in July 1957, the Railways now expect to have availableRs. [.85 billion, raising the total to Rs. 12.35 billion.

124. A financial forecast for the five years 1956-57 to 1960-61 is shownin Exhibit 7. It assumes that the volume of freight traffic carried in thefinal year -will be 47 million tons greater than in 1955-56 (with the increasedivided among the various classes of traffic as previously indicated) andthat passenger revenues will increase by 3% per year.

125. This projection indicates an increase by 1960-61, compared with1955-56, of Rs * 1,O8 mellion in total revenue and of R.s 728 million inordinary operating expenses, or 72% of the estimated increase in revenues.The relationship between the anticipated increases in reven_es and expen_seis in line with experience in the past five years. Mo increase in rates or

- 22-

fares is assumed beyond the 12 1/2% freight surcharge, although such an in-Wea s e m a y co u o 1-Afl4 ,V L t 4 ..!A,ng. nP 4V. Speia Cnn.M. .-. si n r c..,a se

in general wage levels is assumed. ,Thile the actual results are likely tovaxJ- .LromL year .uo year- depenlng on vhe actual leveLl of traffic treceipts. andA

of working expenses, the forecast is the best that can be made at this time.

126. Credits to the Depreciation Reserve Fund over the five years areexpected to amount to Rs. 2.25 bilion, plus Rs. li44 million interest onbalances deposited with the Government. Appropriations to the DevelopmentFund, which will receive the full anticipated surplus after dividend toGeneral Revenue, together with interest, are estimated at over Rs. 1.78bil izon. No appropriations will be made to the Revenue Reserve Fund, butinterest will amount to Rs. 82 million. The details given in Exhibit 8 maybe summarized as follows:

Million Rupees

Depreciation Feserve Fund 2,394Development Fund 1,781Revenue Reserve Fund (interest only) 82

4,257

127. In addition the Railways are expected to spend Rs. 600 million forOnen Line Works which wrill he charged direcptlv to revenies. Tn all. there-fore, additions to Reserve Funds and charges to Open Line WVorks in the fiveyears 1956-57 to 1960Qr61 will total Ps. 4.85 billion fowr nap+ital expnenditurres.

128. Th- forecast 4iAdi..te.4 that -4th4-a-;als -rP .h- F4nds a whole will be less than appropriations thereto. If actual expendituresfrom nai±wnys' sources shoU-id Uxcoeu the1 Ubj jUfiAU Wh k1iU.L'WclW , further

withdrawals would thereforc be possible.

129. In making a larger financial contribution to the Plan, the Railwaysare allo-wIng in pat for additional workS and, in part, fr- cost increases.

-V. r-oc-UU e'MU11 ai r1M1 2-le Vod oi rocarermleSnD

i-0. im^ormation on purcnases aoroad covers oroers piaced in i95, L956

and the first quarter of 1957 for payment after January 1, 1957. The amountconmitted totals U.S. >197.-73 millon eouivalent, approximately O22 Io thetotal estimated foreign currency costs of U.S. $892.5 million equivalent.

131. Foreign currency payment commitments in the two years 1957 and 1958for the major items, locomotives, locomotive spare parts, rolling stock, spareparts, and steel amount to U.S. $17h.7 million equivalent.

A breakdown by countries is given below:-

US$ equivalent in thousands

1957 1958 Total

Austria 3.324 1,006 4,330Belgium 7,919 1,050 8,969France 18,123 2,121 20,244Italy 11,873 4'600 16,b73JanPan 38;613 10,156 h8.769Switzerland 3,345 321 3,666TTni +.Pd Xi nodnm I15;337 39h'5 19,282United States 5,231 19,h26 24,6571AL-st Germn_a I),07 )21j486Yugoslavia 1,932 5,529 7,461Continent (others) 5,796 567633

1IEf7 41I-a 1 74,-7,no

±ile Ui.v±oufl by class o item. s is:-

'u. eqecruiv 'ent' wouusan's

1957 1958 Total

Locomotives and rolling stock 50,673 25,710 76,383Boilers, underframes and

wheel-sets 22,331 ,791 29,122Steel (rails, sleepers,

points and crossings) 52,563 16,632 69,195

125.567 49,133 174,700

132. The Railways normally place foreign orders on the basis of inter-national competitive bidding and have members of their stalf abroad to inspectthe progress and quality of work during manufacture.

vii. Electrification compared with Dieselization

133. In view of the current trend toward dieselization on railways allover the world. the decision of the Indian Railways to replace steam powermainly by electric power on particularly overburdened lines seemed to deserveAesnPeniallyv rareful review. Substitution of one or the other of these tvpesof motive power for steam power is undoubtedly required on lines around largeces, e.sp4e11r Cjial nt+t2 and Rnm.hav where onmmiter traffict is already denseand growing denser, and on certain main lines with very heavy freight traffic.Steam locomotives of the size that can be ̂perAt ove'r wYsiQ ng tracks andbridges on the Railways are inadequate for this traffic load.

13l'. Either diesel or electric power would perform more satisfactorilythan existing steam power. The Plan favors electric power, providing fort.he_ P'-e1t.riflcation of 826 miles of line. Only limited expenditures are to

be made for diesel power which is to be used mainly as a stopgap. One hundred1850 hp. Jdesel electric locomotives are being purchased to be nut in servicewithin the next year on certain heavy freight traffic lines, which are to beelectrified at a lnter date _,.der the Plan, When the electrification work

has been completed, the diesel locomotives will be transferred to the southand -west where the cost of coa' is high and the quality of the water poor.

135. i"n spite of the generl te.ndency toward dieselizatio, the decisionof the Indian Railways to favor electric power in the areas selected appearsjustified. Electric power, generated in both hydro and thermal plants is avail-

able at once at reasonable cost for use on the lines it is proposed toelectrify. in contrast, India has only a limited supply of domestically pro-duced diesel fuel from its Assam fields and would have to import additionalfuel from the Persian Gzulf or indonesia to operate any large number of diesellocomotives.

136. The cost advantages of electric power are shown by studies made bythe Railways of comparative costs of operation with steam, diesel and electricpower. Exhibit 9 gives the results of a study made for the 191 miles of linefrom Igatpuri to Bhusaval on the Central Railway which are to be electrifiedunder the Plan. This section of line runs through a very heavy freight areaand is an important one on the main line between Bombay and New Delhi andAllahabad.

137. The stuidy compares operating costs for three types of locomotives:(a) the standard steam freight locomotive manufactured in India, (b) a 2,000 hp.diesel-electric locomotive, and (e) a 3.300 hp. electric locomotive. The

steam locomotive, the standard type now being produced at the ChittaranjanLomot.o+vi.e Works, was designd hv Tntdian engineers after considerable researchand is their best present design for freight steampower. It is about as heavya locomotive aS can be used in Tndia today given the axle-load limitationsimposed by existing track and bridges. The diesel locomotive reflects thetren.d toward higher horsower and would be adequate for the tyne of servicecalled for on this section of line. The electric locomotive is a type ingeneral use i var ious pats of the world.

138., E-vetn M^ ter t% 1A ,g ncOr ve%_ i %tees depreciation -d maLintenan^ce

on the electric distribution system, gross ton mile costs of steampower exceedt'hose of diesel and elect-ric power by 22%V an%d 41-% respectively, while dieselpower costs exceed those of electric power by 16%. A careful review of theseestimates by the Baxk's consultants inuicated that the cost adva,ntages ofelectric power were even greater than the study showed.

139. The foregoing calculations are based on actual costs that would beincurred by the Indian Railways, with interest at the statutory dividend rateon Government capital invested in the Railways and payments for diesel oilthat include a substantial import duty. Viewed from the standpoint of theIndian economy, it is necessary to recalculate the costs, excluding paymentsof interest and of import duties on diesel fuel. The savings from electrifi-cation indii ated by such adiusted calculations would be smaller, but they wouldstill be enough to give a return of about 12% on the incremental investment.

25- -

140. Comparable details of the studies made for other areas are notavailable. However, in view of the fact that the expected tonnages on theother lines to be electrified are even higher than on the Igatpuri-Bhusavalsection and that the power for railways comes mainly from hydro power orfrom thermal powrer develoned close to the coal areas in the east. w1here theselines are located, it seems likely that they would show greater cost ad-vzrntag. f-or electric pnmir comnared with stem and diesel nowver.

5}1. Moreer,elec_r^tca+ior. has _ _t 1 e.hia da-tgsoedieselization, especially in areas where passenger traffic is very heavy,

correspondingly increased foreign exchange outlays. Both the Second FiveYear Plan e-Ler- Vic -t…Ul pr…gra… n ad1 t-so 1 L -eadUy- conVe1-,UlA appea-justified, therefore, both from the point of view of the Railwrays and of theNational econonyr. Even if additionai discoveries of oii in India sliould mkelediesel fuel available at a reasonable price, it seems highly unlikely that itwould prove desirable to give up the use of electric power on the areas beingelectrified under the Plane

viii. Railways and Road Development

142. The Raillway Plan has to talke into account the development of othermeans of transport, particularly roads and coastal shipping. The problem ofeffective coordination between rail, road and sea transport has been occupyingthe attention of the Government of India for some time, and a number of specialstudies have been,. or arp l-e biin uimdpr t,aln in +.hi.s fip;li. Thr-r i; no rdnohu.bthat road transpolrt has been neglected in the past. In relation to its areaTnAin has one of the lowest i r 4 +he wovrd1 (0.2 r;4es p "

mile); there are still a number of missing links in the main trunk roads; andmnyv of the existing road brdesa too weak to carGry hea"vy t" s. A con-siderable extension and improvement of the road system will therefore be neededbefore roa trar.spo-t4 Can ho pe to com,pete onr. &-vLarge sc 'e -0 withLJ Uthe L_L_-_Vailwa

over long distances. Over short distances the main obstacles to the develop-ren.t of road transport lie less in the condition of the roads than in otIierfactors such as vehicle licensing restrictions, heavy taxation and the highcost of vehicles. These obstacles are being dealt with by the Central Govern-ment, which is conscious of the need for the more rapid development of roadtransport, and in course of time the roads can be expected to increase theirshare of both passenger and freight traffic, as they have done in most othercountries. But it would not be realistic to look for any major diversion oftraffic from the railways to the roads over the next few years. The scopefor the development of coastal shlipping is limited by the port facilities inIndia, which are at present unable to cope effectively with foreign traderequirements. Even here it may prove possible to secure by degrees some furtherdiversion of traffic from the railways, but it IJill take time.

143. A good deal more work needs to be done before a rational plan canbe formulated for the long-term development of transport in India. Any studyof this problem can. however, have little hbnrin on theh programr for rail-way investment in the Second Five-Year plan. This investment is urgentlyneeded to deal with irf.die+= "parly for I-e carriageof bulk commodities such as coal and iron ore, wihich could not in any casebe handled eonntomicaillyby road transport. VVtevr pruvu eveatua-l ly

- 26 -

to bue lthe miiostev ce. %"QUt.bLUUton ofL tr-¢fC"Lk betweenUV QheV ra:'-WVCyO, ro Js.&

and coastal shipping, thlere is no danger that the existing railway investmentprogram will prove excessive i1 relation to the long-ter-I needs of the economily,and in present circumstances the decision to devote the bulk of investmentin transport to the railways is amply justified.

144, Certainly there is every reason to suppose that the expanded railfacilities will be needed even after the pace of road development has beenaccelerated. In 1950, railway revenue ton-miles per unit of population inIndia amounted to only 85, compared to almost 4,000 in the U.S. and Canada,250 in Mexico, 175 in South America, and over 200 in Africa. Although thecomparison among countries is not entirely valid because of differences inpopulation density, there is every reason to expect a great increase intraffic demand in India as economic development proceeds.

ix. Soundness of the Plan

1b5. The Second Five Year Plan for the Railways is basically sound inimportant aspects. The program places major emphasis on expansion of capacityin both line and enuinment. unouestionablv tlhe most urgent need. Litt.l rpruritinr

is feasible in proposed expenditures, particularly on the rehabilitation oft.r2rk and eumi-pm-e-nnt and insTeased canarnitv- The only respect in whi^h theprogram can be criticized is that it may prove too small to make possible theincre2sec v in epity of +he -rlways -n- uc +on esrirv All the nriditinnAl

traffic offering upon completion of the Second Five Year Plan. The Railways-. _ 1>.TTE_LA r- +-lr AA4+-;^"n1 T.T^"Irq + +h^on n.T - 4w!_A-A fn" in +h=

SA a. *S.JlW V- ) WVSiW W .A %A L UW'ISV- VfA aL J'x L&1'1L1 **.fl Ut V ..AAC

Plan and there may be mitigating factors in the delay by one or two years intecomp-letior. of Lthe VCOvPe.^L P.lar. WIhEch. m16htL enbeteP 'as ykepn

their programs to schedule, to make good the shortage of capacity.

V BMAI 'WS PARTAICIPATIONT li ' FINUL N'CDJIV u THU Z PLfUN

14i6. The Railway's foreign currency requirements for the Second Five YearPlan have been estimated at US $892.5 million equivalent. It is suggested thatthe sum. of US y0O million equivalent, which has been mentioned as the amountthe Bank might be prepared to lend at this juncture, should be applied tofinancing the foreign exchange required for orders placed abroad by the Rail-ways for such goods as locomotives, rolling stock, spare parts, and othermaterials and equipment, on which payment falls due in 1957 and 1958.

147. In view of the nature of the Plan and the period for its execution,a term of fifteen years for the loan; including a grace period of fouryears, would appear to be appropriate.

EXHIBFT I

X, 7;R A I L W A Y M A P

K N ALEGEND

- BROAD GAUGE - OTHER GAUGES

AftWE S T__A K I ST I Oa

N4 _ 1A 0a 4L

___Ss RAIL)YAILY ___

0'X' " " 1

INDIAN RAILWAYS

FIN!ANCIAL RESULTS

YEARS END]NG MARCH 31. 195357, INC:WSIV1

IncreaseEstimated 1956-57

1952-53 1953-54 1954-55 1L955-'j6 1956-57 Over

_______ _____ ______ __ _ _195253(In Tho usands o-f Ru-pee.--- '-1525

Receipts _. _ _ _ .____

Passenger 1,00o,838 999,202 1,026,153 1,,077,(91 1,160,100 15.6Freight 1,431,929 1,447,679 1,559,454 1,774,318 1,9918,100o 39-5Miscellaneous 2659,830 ___296,o4 6 282,169 _ 311,497 347,90c 28.9

Total 2,705,597 2,,;8627 287,776 3 90,, s -L3,5C0,0 - 9E

ExpendituresDepreciation 300,000 300,000 300,000 450,(00 450,000 50.0Other (incl. Suspense) 1,879,589 _20

15,050 2,053,677 2,129,508 2,306,00C 22.7Total 2,179,589 2,315,050 2,35353 2,579,500 - '-U - - 6.4

Payment to Wlorked Lines 2,129 2,803 2,141 2,659 3,_100 45.6

Net TraLffic Receipts 523,879 425,074 506,958 580,739 747,000 42.6

Miscellaneous ExpendituresOpen Line Work - Revenue 40,500 43,8oo 4,100 59, io4,ooo 156.8Other, 13j,692 _ 14 849 1-7 212 _ 17,642 18 31.5

Total. 1i,92 58,649 _ _,3 77,342 122,000 125.1=

Net Revenue Receipts 46C3,687 366,425 440,646 503,397 625, ooC 33-1

Dividend to General Revenue 329,164 331,571 339,458 349,881 377,000 14.5

Net Surplus (Government Railways only) 14C),523 34,854 101,188 153,516 248,oo0 76.5

Net ChELrges Manuf acturing Units andMiscellaneous Items 8,646 9,283 110,174 11,:307 12,000C 38.8

Net Surplus Credited to Reserves 131,877 25,571 91,014 142,209 236,ooo0 79.0 e______ _ _ .____ _ ____ ___ N

SIMMARY OF SLCD OPERATIlNG STATESTICS

BROAD GAUGE LINES

Per CentChaage

1951-52 1952-53 1953-54 1954-55 1955-56 1955-56

Over1951-52

Total tons of freight carried (A) (000) 100,944 100,918 100,849 13L1,469 125,158 +24.0Total net ton miles (000) 24,970,732 24,514,360 24,972,419 27,346,414 30,° 47, 28:1 +23.5

Total number of passengers carried (A) (000) 828,674 815,939 858,847 883,011 916,424 +10.6Total passenger imlles (000) 25,999,979 23,889,479 25,116,204 25,597,979 26,134,96:2 + 0.5

Train milees - freight (000) 50,052 50,908 50,498 53,375 57,246 +1i4.4Train'mileEs - passenger (000) 57,907 5 _ _ 60,597 6 62,0'32 640 + 9.5Total trairn miles (B) (___) _ _ 15,449 117 072 _ _ 18l1 123,592 i28,68L +11-5Switching engine miles (000) 23,335 23 24 25,571 2,20 +1:2.3Miscellaneous engine miles (C) (000) 14 080 13,857 _ 14,498 14 714 145:1 +9.7Total engine miles (000) ]52cK 154,952 N38*l75 183177 ijA77 170,333 +11.4F

Total gross ton imiles - incl. weight of enginc (000) 82,;60,535 82,944,703 84,472,351 90,248,475 97,359,890) +1'7.8Gross ton miles per route mile 5,446,652 5,450,882 5,541,285 5,832,105 6,253,203 +14.8Train milesi per running track mile per day 17.6 17.9 17.6 18.1 18.7 + 6.3

AveraIge spe-ed of freight trains -- steam 10.7 10.4 10.2 10.4 |.8 - 8.4Average treLin load - gross weight: - excl. engine - steews 922 910 927 5955 | 53 + 7.2

Freight car miles - total (000) 2,202,653 2,265,755 2,274,339 2,448,400 2,644,554 +20.1Per cent loaded of total 69.5 69.1 69.3 70.3 7:1 .9 + 3.5Freight car miles per day (D) 40.9 41 8 40.1 43.3 46-3 +13.2Average loead - tens 16.4 15.6 15.7 15.8 16.1 - 1.8

Freight car miles per switching engine hour 562 564 543 572 6o:L +/5.9

Engine miles per day per engine on line - incl. work - steam 79 80 83 85 84 + 6-3Engine mile-s per day per engine on line - inel. work - elec. 143 145 146 148 135 - 5.6

Averalge percentage undLer or awaitiing repairsFor engines - steam 18.26 17.91 18.04 17.19 16.78 - 13.1For freight cars 7.40 7.65 7.34 6.79 4.t68 -36.8For passenger cars 13.41 12.77 11.50 11.02 10.19 -24.0

Number hot boxes, coaches and freight cars *- monthly 2,370 2,539 2,510 2,377 2,195 - 7.4

(A) Tons and passengers; counted on each railway handled.,(:B) Includees mixed and work train.ICC) Also includes light and assisting engine miles(D) In terms of 4-wheelers.

INDIAN RAILWAYS

REQUIREMENS OF ROLLING STOCK (EXCEPT ELECTRIC)AND AGE OF EQ-UIPM'T

Broad Meter NarrowGauge Gauge Gauge Total

LocomotivesAdditional requirement 468 451 - 919

Replacement requirement 962 402 81 1,445

Total 1,430 853 81 2,364

CoachesPassenger CoachesAdditional requirement 890 1,760 - 2,650Replacement requirement 4.392 1.1y22 633 6,447

Subtotal 5,282 3,.i.82 633 9,097

Other Coaching VehiclesAdditional requirement 874 1j6o4 - 2,478Replacement requirement - _ _

Subtotal 874 1,604 - 2.478

Total 6,156 4,786 633 11,575

Wagons

Additional requirement 66,575 16,820 - 83,395Replacement requi:eeitnt 1487 4.,52 4,021 ,Q=o

Total 81,454 21,772 4,021 107,24,

PERCENTAGE OF OVEPAGED STOCK TO TOTAL STOCK ON LINE

Locomotives Wagons Coaches

March Broad Meter Broad Meter Broad MeterGauge Gauge Gauge Gauge Gauge Gauge

1951 23.0 31.0 13.3 29.4 29.5 45.01956 32.5 26.0 16.5 17.2 24.0 26.4

1961 16.2 22.5 6.6 11.9 10.0 9.5

Exhibit 5

TT-MTAV PATTAI4AY

DOLTUBE TParKI.NTGLII'E CAPACITY WORKS

Eastern RailwayBokaro Earko1akaa3

Ondal-Ukhra 7 43

South Eastern Railway

Rourkela-Nagpur 446Gerhdhrubeswar- JyochandipUhar 4Sini-Gomharria 10Sini-Kandra 4Rajkharswan-Barajamda 60Nergundi-Eiurda Read 26Khargpur-Tatanagar* 30 605

Central RailwayDelhi-Agra** 77Katni-Jubbulpore 57Jubbulpore-Itarsi* 80 214

Southern RailwayArkonam-Je- arpet 90

Waltair-Rajamundry* 30Bezwada-Gudor 182Jalarpett-Erode* 60Arkonam-Renigunta 40 402

Northern RailwavAllahabad-Kanpur* 60XFnnpur-Lucknow* 1I

Rewari-Delhi* 30Morabad-Saharanp1n'* 05

Western- Ra~i1.wr

Godhra -Bat lam 115MarodA-A-aA loo

Ratlam-Nagda .26 163

North Eastern RailwayW' -1 tA 4; _ -TN _- _ _ t wAC LILL . s-Z=-s v a c

Mansi-Khagaria 5 29

1,607

In the case of these lines, only partial doublingis provided for; the mileage to be doubled is statedagainst each line.

EXH11BT 6

C H/NA APA AS rAV .

MOGAL- EAA '8^-b' - ~ ~ ~~=aG A c\EA.s T

GOMONAISANSUe/K/5JAAI

GOMON, BUR 'WAN

RAJ-KHARSAWA9e\ SA ALCUTTA

ROURHELA, 4-KRI

\ .BI.iUSA V AL NOAM UNDtl '1-- /- 0 < 5~~HtUSAVAL

VIRARI G.Al

BOMBAY ...O..

i ' I7 )MADRAS

\7Q~z VILLUPURI'(

ELECTRIFIED TRACK AND SOURCE OF POWER '/OT ro,caI

LEGENDAFTER 1125 CRORE PLAN ---- ADDITIONAL PROPOSED IN 1480 CRORE PLAN

* SOURCE OF POWERCOVERDALE & COLPITTS

CONSUETiNG ENGiNEERS

120 WALL S7TeET, NEW YORK 5, N Y

Exhibit 7

INDIAN RAILWAYS

FINANCIAL FORECAST TEPOUGH PERIOD OF SECOND FIVE-YEAR PLAN

(47 Million Additional Tons Estimate)

TotalHeads 1956-57 1957-58 1958-59 1959-60 1960-61 1956-57

to 1960-61(In Millions of Rupees)

Gross ReceiptsPassAngers 1.160.1 1,195.0 1,230.9 1,267.8 1,305.8 6,159.6

Other Coaching 205.0 230.0 222.2 224.4 226.6 1,108.2____ 1j42 1 2.051.1 2.223.2 2;379.3 2,59550 11,150.7Sundries 72.9 81.0 82.0 83.0 84.0 402.9

Total 3,380.1 3 %758.3 3I954 5 hj714 18;821.4

Working Expenses 2,306.0 2,440.0 2,574.4 2,708.8 2,857.4 12,886.6

Payment to WorkedLines 3. 3.1 3. 3.1315.

Miscellaneous Ea-penditure 18.0 24.0 25.3 25.3 25.3, 117.9

Open Line Works -Revenue 104.0 115.0 131.0 130.0 120.0 600.0

Appropriation toDRF 450.0 450.0 450.0 450.0 490.0 2,250.0

Total Expenses 2,881.1 3,032.1 3,183.8 3,317.2 3,455.8 15,870.0

Net Revenue 499.0 525.0 574.5 637.3 715.6 2,951.4

Dividend 377.0 438.0 496.0 564.2 608.6 2,483.8

Surplus 122.0 87.0 78.5 73.1 107.0 467.6

Surcharge * 126.0 222.0 282.4 302.2 323.2 1,255.8

Total Surplus 248.0 309.0 360.9 375.3 430.2 1,723.4

* For these calculatio-n it hasbeen a-ssRmed that the

present surcharge of 6-1/4% on freight traffic and theadditional 7rchirge on o6-1/4d thint be Panmes effectriin July 1957 will continue for the entire Plan Period.

Exhibit 8

I1D IAN RAILWAYS

POSITION OF RAILWAYS FUNDS

47 Million Ton Plan

Year Appropri- With- Closinzat'Lon to Interest drawals Balancethe Fund

(In Millions of Rupees)

DBPRECIATION RESERVE FUND

1955-56 1,034.71956-57 450.0 33.8 460.0 1,0o,8.51957-58 450.0 34.4 470.0 1,072.9

1958-59 450.0 31.6 670.0 884.51959-60 450o0 25.2 680.0 679.71960-61 4so.o 19.0 650.0 498.7

Total -2,250.0 144.0 2 ,930.0 498.7

nETELPMENT FMITN

1955-56 129.71956--7 2-248 4-7 220.o 162;41957-58 309.0 4.2 380.0 95.6

1959-60 375.3 15.7 100.0 634.51960-61 430.2 26.2 0'- 00 990.9

Total 1,723.4 57.5 920.0 990.9

REVENE PESEVE FUND

1955-56 468.91956-57 15.4 484.31957-58 15.8 500.11958-59 16.4 1516.5

1959-60 16.9 533.4

1960-61 17.5 550.9Total 82.0 550.9

INDIAN PAILWAYS

COMPARISON OF OPERATING COSTS OF LOXOMOTIVES ON CEITRAL RAILROAD

BHUSAVAL-I]GATPUP.I SECTION-- 191 MILES

GRADIEi .6ir PER CENT LOADED DIRE'TION, 1 PEE CENI' EMPTF DIRECTION

-Item 2,000 H.P. W.G. 3,30c0 H.P. 2,000 H.P. W.G. 3,300 H.P.Diesel Steam Electric Diesel _ ;teee m Electric

(Rupee Its Epressed in Dollars

1. Monthly mileage 7,000 3,480 8,700 7,000 3,480 8,700

2. Load hauled - ton1s 1,80o 1,60O 2,300 l,800 1,600 2,300

3. 1,000 G.T.M. per month (1 x 2) 12,600 5,556 20,000 12,600 5,556 20,000

4. Parchase price ofr locomotive - rupees 1,250,000 530,000 880,000 $262,500 $111,300 $184,800

5. Life of locomotive - years _ 20 40 33 20 40 33

6. Interest (i4%) + .depreciation per month - rupees 7,650 2,870 5,350 $1,607 $603 $1,124

7. Average emolument of crews - rupees 320 450 320 $67.20 $94.50 $67.20

8. Mileage earned by crews 3,oo0 2,910 3,000 2,910

9. Crew wages per month - rupees 750 538 750 $157.50 $112.98 $157 50(1 x 7 t 8)

10. Fuel consumption per 1,000 G.T.M. - lbs. 9 o10 9 110

11. Total consumption of fuel per month - tons 51 273 51 273(10 c 3 t 2,240)

12. Cost of fuel per ton - rupees 275 35 $57-75 $7-35

13. Monthly cost of fuel - rupees 14,0:25 9,555 19,000 0 $2,945.25 $V,006-55 $3,990 o00-(lix 12)

14. Average maintenance ccist per month at rate cfRs. 0.75 per 1,000 G.T.M. - rupees 9,450 4,170 5,200 $1,984.50 $875-70 $1,092.00

15. Total monthly coist - rupees 31,875 17,133 30,300 $6,693.75 $3,597.93 $6,3630oo(6 + 9 + 13 + 14)

16. Cost lper 1,000 G.T.M. - rupees 2.53 3.08 1.515 .53 .65 -32

17. Cost of fixed structures - rupees 50,300,000 $10,563,000.00

18. Interest (4%), depreciation (2%) andmaintenance (3%) per month - rupeee ( for 213 377,250 79,222.57*lectric loconotive..)

19. Cost per 1,000 G.T.M. - rupees .674 .14 a

20. Total cost per 1,000 G.T.M. - rupees 2.53 3.08 2.19 .53 .65 6

Utinated Xioatbly eaot of oleatria powr