It has been a long drawn tussle between the railways and the road sector over freight rates and movement of goods. So, where is the battle headed to now with new faces heading both the ministries?
Former railway minister Lalu Prasad's populist rail budgets did win kudos from the masses but surely it didn't win accolades when it came to firms that were looking for deeply discounted rates for carrying goods.
As a result, the country's largest public sector unit's freight collections took a beating. Worse, the economic slowdown added to its woes. In the year ended March 2008-09, rail freight grew a mere 4.89 per cent, far below than the targeted 7.05 per cent.
Raghu Dayal, former chairman of Concor, said, โRailways carry bulk goods like coal and iron ore, but consumer goods are carried more by the roads sector. This is an anomaly that needs to be corrected. But it has not happened, not because there isnโt traffic but because the railways do not have the capacity and the marketing ability."
On the other hand, despite the hue and cry about bad roads and congested highways and multiple tollbooths, roads still handle 65 per cent of the cargo compared with about 35 per cent of goods that ferry on rail tracks.
And given Road Minister Kamal Nath's thrust to build 20 km of roads every day, the railways have every reason to think that the competition from roads is likely to intensify.
But the big question is, why is it that the railways, which has one of the largest networks in the world, has failed to eat up more market share.
Vineet Agarwal, ED of Transport Corporation of India, said,"Road sector will continue its trend in the next few years also because service quality of railways is still not there. We have the problem of getting rakes on time and as well as commitment in terms of delivery. Secondly, railways do not provide door to door service."
Experts are of the opinion that even if rail freight rates come down, the country's road network will continue to take the load as the railways have a long way to go.
The trouble is that the railways have mostly focused on improving services for passengers, the country's big vote back. In the process, some of its big business may be slipping onto the roads.