Inter-Modal Shifts and Sustainability: Call for Freight Transport Privatization in the Indian Railways

Abstract

Given the inherent limitations of state-financed infrastructural development, it is unrealistic to keep looking towards the government in emerging economies to fund the much needed restructuring of their transportation segment. With the Indian Railways facing an unchecked decline in freight transport mix, this study examines the politically romanticized ‘public good’ nature of Indian Railways to elaborate the need for a modal shift in policy for achieving sustainable transportation. Based on the analysis of historic data, the projected modal split in freight transport is modelled through two scenarios. The business as usual scenario indicated continued preference by the industry for road-based cargo movement. Although the government’s National Transport Development Policy Committee calls for increased investment in rail infrastructure and technologies to reach the targeted modal split of 50:50 by 2030 it fails to elaborate where, and who, will finance this venture. This communication thus calls for the privatization of the Indian rail-freight shipment through vertical integration and sub-networks creation. Arguments are supported by scrutinizing past inter-modal shifts in demographically similar Latin American countries.