Sectoral Issues in Transportation

Group-13

Air Transportation
Airports 60 airports managed under Airport Authority of India 37 million passengers and 0.7 million tonnes of cargo with 0.42 million aircrafts Growth rate of cargo traffic is 2.5% and international passengers is 3.9% 51.1% of passenger traffic, 63.2% of cargo traffic and 45% of aircraft movements handled by Mumbai and Delhi Issues in building airport Location: Near urban growth with access to key urban areas Land Acquisition: Environment must not be deteriorated Air Services Main Players: Indian Airlines and Air India and Jet Airways

Air Transportation
Bundling policy
Seat kilometers in category II and III are in proportion to category I

kilometers Airlines do not offer lucrative services in former categories Unbundling must be followed and separate bid must be invited for category I and II
Cargo market is completely deregulated

Privatization 40% of foreign equity is permitted Aim to increase domestic service levels and efficiency Safety Standard maintenance and need to improve disaster management service

Rail Transport
Rail
62,809 kilometers route, 81,511 running tracks and 6896 stations

Freight traffic 442 billion tonnes kilometers(btkm) and passenger

traffic 404 billion passenger kilometers(bpkm)

Growth and trend
Market share dropped from 89% to 33% in btkm and from 80% to

16% in bpkm Share of coal going up and steel and iron share dropping due to out pricing of finished goods in IR Increase in the share of non-suburban upper class and reduction in second class due to other means of road transportation. Electrification of mainline routes resulting in high average speed
Issues
Lack of Customers: Due to competition expectations have grown Irrational Pricing: Not able to tap consumer surplus

Rail Transport
Solutions
Restructuring: Separating facility infrastructure with provision of

services
Issues in Restructuring

High transaction cost and less coordination IR not a marginal player in the transportation

Resource Generation Improvement and Expansion of Services

Increase freight rate and quality Focus on value-added services Expanding of customer base (advertisers, telecom operators and estate developers) Reducing Costs Reducing manpower Increasing asset utilization Market Borrowing

Rail Transport
Build, Operate and Transfer (BOT) and Build, Operate, Lease

and Transfer (BOLT)

Reduce project financing and completion risk
Expected to absorb downswing in the business

Budgetary Support
Essential commodities carries at low cost

Concession passenger ticket

Investing in uneconomic line

Multimodal Transport
Overview In 1998-99, out of 1.93 million export /import handled at major

ports. 0.33 million connected through rail

Issues Main line container vessels do not avail the container hanling

facility at ports Cost of moving is high as compare to South-East Asian ports Complementary rail networks are not developed Documentation, handing and lack of coordination
Solution Investment in
Ships, cargo units, port facilities, transport vehicles, Inland container depot,

warehouses etc.

Development of non-containerized multimodal transport Enhancing service levels through guaranteed departure and transit time Providing strategy located and unutilized railway land Maintaining and manufacturing railway wagon