International Railroad Discussion > India Rail Revamp....Not So Fast

http://www.bloomberg.com/news/2014-07-30/railway-revamp-faces-reality-at-aborted-factory-corporate-india.html

Axed Factory Shows Task for Modi’s China-Like Rail Revamp


Prime Minister Narendra Modi aims to transform India’s railways with new track and high-speed trains. Bharat Heavy Electricals Ltd.’s (BHEL) decision to scrap a $133 million factory for commuter coaches shows why he faces an uphill task.

The planned plant was axed due to a lack of demand from Indian Railways, said Ambuj Sharma, a Bharat Heavy board member in New Delhi. Building work didn’t get far past a foundation stone laid last year and land earmarked for the factory in Rajasthan state is idle, according to Sharma.

The aborted plant shows how Indian Railways, whose network was developed partly under British colonial rule, struggles to fund upgrades because of pressure to curb ticket costs. The state-owned operator estimates pending projects need 5 trillion rupees ($83 billion), overshadowing Modi’s fare increase and pledge to woo foreign investment since his election in May.

It would appear to be operated like a public utility and thus is not subject to market pressure

John Gezelius
Tustin, CA

The current Indian Railways headcount is over 1.3 million

The incoming right wing government should be able to cull this socialist largess back to under 600k, with no appreciable fall in service

The previous administrations have insisted that everything be done in-house, hence the deliberate sabotage by the Indian hierarchy of free enterprise's attempts to enter the loco and carriage build business

The outgoing minister was selling seats on the Railway Board at around US$1.8 mil per seat, so you can only guess at the bribes been paid by suppliers to warrant a $1.8 mil payment to get ones snout into the trough

http://zeenews.india.com/news/nation/railgate-court-frames-charges-against-pawan-kumar-bansal-s-nephew-9-others_917253.html
http://timesofindia.indiatimes.com/city/patna/Two-railways-officials-6-others-booked-for-bribery/articleshow/34654895.cms

jmt Wrote:
-------------------------------------------------------

> The outgoing minister was selling seats on the
> Railway Board at around US$1.8 mil per seat, so
> you can only guess at the bribes been paid by
> suppliers to warrant a $1.8 mil payment to get
> ones snout into the trough

This is pretty much all you need to know about IR.

Waybiller Wrote:
-------------------------------------------------------
> jmt Wrote:
> --------------------------------------------------
> -----
>
> > The outgoing minister was selling seats on the
> > Railway Board at around US$1.8 mil per seat, so
> > you can only guess at the bribes been paid by
> > suppliers to warrant a $1.8 mil payment to get
> > ones snout into the trough
>
> This is pretty much all you need to know about IR.

But if you are an entrepreneur looking for an opportunity, the question is the future going to look like the past. The need in India for more efficient transport in general, of which rail could be a part, is huge. Clearly you can be a pessimist and put nothing at risk. But at some point something may just happen and the entrepreneur smart enough (or lucky enough) to be in a position to take advantage of change could have a very good business opportunity. The risks are large but so are the rewards. You just need to be smart enough to manage the risks.

JBWX

jbwest Wrote:
-------------------------------------------------------
> Waybiller Wrote:
> --------------------------------------------------
> -----
> > jmt Wrote:
> >
> --------------------------------------------------
>
> > -----
> >
> > > The outgoing minister was selling seats on
> the
> > > Railway Board at around US$1.8 mil per seat,
> so
> > > you can only guess at the bribes been paid by
> > > suppliers to warrant a $1.8 mil payment to
> get
> > > ones snout into the trough
> >
> > This is pretty much all you need to know about
> IR.
>
> But if you are an entrepreneur looking for an
> opportunity, the question is the future going to
> look like the past. The need in India for more
> efficient transport in general, of which rail
> could be a part, is huge. Clearly you can be a
> pessimist and put nothing at risk. But at some
> point something may just happen and the
> entrepreneur smart enough (or lucky enough) to be
> in a position to take advantage of change could
> have a very good business opportunity. The risks
> are large but so are the rewards. You just need
> to be smart enough to manage the risks.
>
> JBWX

The present opportunities are quite substantial enough, but if you have a zero tolerance of corruption then the only question is how much you are willing to invest in waiting on a future in which something may just happen. Very difficult to show an ROI in being a bystander.