Investment in rail, roads to reduce per-km transport costs

29 February 2016

Alagu Balaraman, partner and managing director, India Operations,  CGN & Associates India Pvt. Ltd.

Combined investment in road and rail of Rs. 2,18,000 crore  will bring down per km cost of transportation, thus fuel economy.  The Indian economy has been hobbled by poor infrastructure for decades. This makes our cost of doing business high, particularly for small and medium enterprises. On an average a truck travels 250-300 km per day in India, compared with 600-800 km in China. Our ports turnaround shipments in 84 hours, whereas the number is 7 hrs in Singapore. As a poor country, we simply cannot afford this waste.

The railway budget has announced that existing terminals and sheds will be given access to for container traffic. Rail-side logistics parks will be developed. The finance minister has announced a total investment of Rs 97,000 crores in roads in 2016-17.Additionally, a further 50,000 km of roads will be converted to national highways. Combined with the rail budget, a total of Rs 218,000 crores will be invested in 2016-17.

These investments will dramatically improve transit timing and reduce the per km cost of transportation. The railway logistics and time tabled freight container trains will give new options for logistics managers to lower costs and improve responsiveness.

All we need now is for the GST Bill to get passed.

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