For a new transport strategy with the due place of railway in it
Wednesday, 10 February 2010
Enamul Haque
For many years, Government's transport strategy has largely focused on the road sector - with 85% of the annual transport development budget allocated to roads. Donor support broadly mirrored this pattern of emphasis.
Bangladesh Railway (BR) has received very little capital investment, because most of the available government funding goes to underwriting its losses on operations and passenger services. With dilapidated infrastructure and rolling stock, and associated poor staff morale, it is no wonder that railways has lost share to road transport. Once considered the backbone of communication in this region, today Bangladesh Railway has a fringe role in the country's transport system.
A rapidly growing economy - projections are for 6-7% growth annually - needs an efficient and effective transport system. Power may currently be the more binding constraint, but transport too could become a bottleneck.
The transport system also needs to be more balanced across different modes than presently with less relative emphasis on roads: First, expanding roads requires large scale land acquisition, a major constraint in Bangladesh; land acquisition often implies resettlement, another costly and difficult proposition in a land-scarce densely inhabited country like Bangladesh;
Second , road safety is already a major concern in Bangladesh. Eight to ten persons die every day in road accidents, and traffic and road-related accidents are the tenth largest cause of disability and death in Bangladesh. It has been estimated that the cost of road accidents -- in terms of lost life, health and productivity, caring for the handicapped etc. -- is 2% of GDP lost annually. Railways are much safer, and are not associated with such collateral damage. Third, road transport has major environmental 'externalities', as we, living in Dhaka, know. In Manila, a city as polluted as Dhaka, a study found that lead and other vehicle-related pollutants caused irreversible brain damage to children under age 2, causing a five point reduction in their IQ, and reducing their educational attainments and their productivity and incomes in later adult work.
Railways, by contrast, can be expanded with little land acquisition, and is more environmentally sustainable. It saves on energy and generates less pollution. In densely used corridors, railways could provide an efficient passenger transport system; on the Dhaka-Chittagong corridor, rail transports freight containers much more efficiently than trucks. Currently, Bangladesh Railways carries only 10% of the containers coming to Chittagong. Better management practices could easily increase this.
For Bangladesh Railways to better support the economy, a major modernization will be needed, calling for the coordinated effort of government, railways management and labour, and donor partners. Major investments will be needed, in tandem with reforms to improve BR's organizational structure and management practices, supported by a revamped policy environment for railways
A key step will be to implement government's plan to transform Bangladesh railway into a corporate entity. A corporatized BR would operate like a business, while remaining fully government-owned. In successful corporatizations, the government-as-owner has an arms length, "hands-off" relationship with the corporatized entity, which can make independent operational and commercial decisions without government interference.
For many years, Government's transport strategy has largely focused on the road sector - with 85% of the annual transport development budget allocated to roads. Donor support broadly mirrored this pattern of emphasis.
Bangladesh Railway (BR) has received very little capital investment, because most of the available government funding goes to underwriting its losses on operations and passenger services. With dilapidated infrastructure and rolling stock, and associated poor staff morale, it is no wonder that railways has lost share to road transport. Once considered the backbone of communication in this region, today Bangladesh Railway has a fringe role in the country's transport system.
A rapidly growing economy - projections are for 6-7% growth annually - needs an efficient and effective transport system. Power may currently be the more binding constraint, but transport too could become a bottleneck.
The transport system also needs to be more balanced across different modes than presently with less relative emphasis on roads: First, expanding roads requires large scale land acquisition, a major constraint in Bangladesh; land acquisition often implies resettlement, another costly and difficult proposition in a land-scarce densely inhabited country like Bangladesh;
Second , road safety is already a major concern in Bangladesh. Eight to ten persons die every day in road accidents, and traffic and road-related accidents are the tenth largest cause of disability and death in Bangladesh. It has been estimated that the cost of road accidents -- in terms of lost life, health and productivity, caring for the handicapped etc. -- is 2% of GDP lost annually. Railways are much safer, and are not associated with such collateral damage. Third, road transport has major environmental 'externalities', as we, living in Dhaka, know. In Manila, a city as polluted as Dhaka, a study found that lead and other vehicle-related pollutants caused irreversible brain damage to children under age 2, causing a five point reduction in their IQ, and reducing their educational attainments and their productivity and incomes in later adult work.
Railways, by contrast, can be expanded with little land acquisition, and is more environmentally sustainable. It saves on energy and generates less pollution. In densely used corridors, railways could provide an efficient passenger transport system; on the Dhaka-Chittagong corridor, rail transports freight containers much more efficiently than trucks. Currently, Bangladesh Railways carries only 10% of the containers coming to Chittagong. Better management practices could easily increase this.
For Bangladesh Railways to better support the economy, a major modernization will be needed, calling for the coordinated effort of government, railways management and labour, and donor partners. Major investments will be needed, in tandem with reforms to improve BR's organizational structure and management practices, supported by a revamped policy environment for railways
A key step will be to implement government's plan to transform Bangladesh railway into a corporate entity. A corporatized BR would operate like a business, while remaining fully government-owned. In successful corporatizations, the government-as-owner has an arms length, "hands-off" relationship with the corporatized entity, which can make independent operational and commercial decisions without government interference.