Developing the Railway Sector in Bangladesh

Name: Zakia Afrooz ID: 11264001

Course Name: Managerial Communication Code: Bus 501. Section: 1

Submission Date: 18.04.2012

Abstract Bangladesh Railway is a promising sector for Bangladesh in terms of transport solution, regional connectivity and economic growth factor. Railway is facing many problems due to administrative complicacy, lack of government focus and other regional factors. But the prospect is enormous for the railway sector. Regional connectivity, export growth and trade, GDP growth and the freight gateway can be achieved. If we can develop the quality and the standard of the service the railway sector can outperform in terms of economic accelerator. Introduction Railway one of the oldest transport mode of Bangladesh has immense contribution to economy with huge potential. The Bangladesh economy is burdened by major transportation constraints that lead to lower efficiency, higher transport costs, and more significantly, transport unreliability, with major adverse consequences for the economy. These are increased marketing risks, quality determination, and resulting lower price for farm products, which reduce producer incentives; failure of delivery schedules in exports affecting competition. Bangladesh Railway (BR), a principal transportation agency of the country, is a Government-owned and Government-managed unique organization, serving a population of approximately 140 million living in an area of 1,55,598 square kilometers. But the significant organization is facing obstacles in every step. Due to truncation from the main system, BR is handicapped to serve the country effectively and efficaciously without proper re-orientation and development. Since the liberation of Bangladesh, instead of constructing new rail-routes, some of the branch line railway sections were declared redundant and subsequently closed and no proper attention to maintain the existing asset was being given. More than 1200 kms rail lines are under risk for operation due to lack of proper maintenance. Besides, one of the major problems presently faced by the BR is a serious shortage of locomotives and route capacity.

The opportunities are enormous in this sector that needs to develop and maintain to encounter the demand of regional and international connectivity to get comparative advantage as a growing nation. Problem: Inherited physical problems: The three physical constrains for is natural condition (like river erosion, soil condition and flood), low investment and inadequate institutional framework (four ministries, nine transport sector parastatals and lack of co-ordination and autonomy of transport parastatals). Corruption: corruption is one of the major reasons for Bangladesh Railway to develop. Every year Bangladesh railway books loss where as the profitability prospect is higher. 4,635.51 acres of railway land grabbed (Source: The Independent Thu, 16/02/2012) till 2012. In every step the corruption hinders development dramatically. Gauge problems: The railway system comprises two gauges, Broad Gauge & Miter Gauge, which involves transshipments of traffic at the break of gauge points. Recently, Dual Gauge (DG) has been constructed in some important sections to ease the problems. Geographical constraints: Rail transportation is very much attractive for long distance uninterrupted route network. But Bangladesh, a small county of only 1, 55,598 square kilometers, is a land of rivers. Hundreds of rivers are flowing over the territory. So we need to build a lot of bridge on the rivers. Managerial problems: Bangladesh Railway management system is under experiment for a long time. It take a long Lack of government attention: Bangladesh Railway is a neglected sector for a long period. No Government of Bangladesh has patronized this thrust sector properly for unknown reasons. Road infrastructure has developed tremendously for huge invest during the last decades. On the other hand, negligible allocation of resources to rail sector compared to roads has led to paralyze the rail transportation system of the country year after year. No remarkable project/program has been taken to develop and strengthen the railway network; on the contrary, existing railway infrastructures cannot be

properly maintained due to lack of resource. As a result, railways are always at a disadvantage compared to road transport. Lack of modernization & development: The expansion of BR has been blocked since 1947. Only 80 kms rail line has been constructed for last 50 years. On the other hand, more than 1200 kms rail lines are under risk for operation due to lack of proper maintenance and attention which is mainly for insufficient fund allocation. As a result, derailment has become common. This has adverse impact on the efficiency and reliability of railway services. Lack of coordination: Bangladesh railway is a large organization comprising of two zones- East & West, divided by the river Jamuna, under the administrative control of two GMs who are accountable to DG. Each zone is further divided into a numbers of divisions under the control of Divisional Railway Managers (DRMs) in association of different Departmental Heads & subordinates. This large amalgamation frequently creates coordination problems. Same Space sharing: The railway tracks and the roads are bisecting in many areas. Specially in city area that causes huge traffic jam and more accident. Prospects of Bangladesh Railway Projected benefits: Providing the revenue system to private body Bangladesh

Railway can earn more revenue. Public Private Partnership can work and enhance more opportunity to expand further. If the quality and the benchmark can set to international standard then more project benefit can be ensured. Bangladeshs potential to be transport hub: Bangladesh holds the geographical advantage for transport in south Asian region. Bangladesh can have the opportunity to become a giant to develop further. Bangladesh is using railway for transport less than other options because of the mismanagement. Globally transport system can engage Bangladesh railway as a promising partner. Comparative Advantage: Bangladesh Railway is cheap, attractive alternative and can provide high portability for the business organization that with enhance GDP growth. The transport system can mobilize the business activity faster.

Regional Connectivity: Regional connectivity has encouraged Ashugonj and

Chittagong port to develop dramatically. Finding the road is costly transport than railway, Railway can be the best solution to reduce pressure on the infrastructure in Bangladesh. Environmental issues can be resolved through this way. Time Frame: Dhaka-Chittagong chord rail: At present, Dhaka, with the population of 14.0

million, is the capital city of Bangladesh, and has the control of the nations politics and economy. While Chittagong, having 5.0 million populations, is facilitated with the nations commercial capital and is the most advanced industrialized area and the principal sea port of the country. It is expected that in 2015, 134 million (46.05% of the total country) passenger traffic and 42 million tons freight will move in this corridor. Moreover, as more than 75% foreign trade of the country is performed by Chittagong port, this corridor has utmost importance in the context of Bangladesh transport. Chittagong-Coxs Bazar link: If Bangladesh can take strong step to set a quality railway system in Chittagong Coxs Bazar Link then the transport system will be more efficient for Bangladesh. Shipment through ship can be distributed in places through rail way with low cost, low traffic jam, low slack time and with dependability. Trans-Asian railway route: Geographically Bangladesh can easily connect giant Asian railway route like China, Korea, India and other countries where Bangladesh can reduce export and import cost as well as explore new sector as the transport system is smooth. Container services: Container service facility can enhance more growth Energy Consumption: We are consuming more oil and gas for our in turnover and can be batter transport option for the business. transport and portability. But the we can reduce the energy consumption and can reduce pressure on budget. Thus the currency rating will be facilitated and inflation will be less as the deficit will be less. Freight traffic The railway has been facing tough competition with other modes of transport for the high rated traffic, which pay more revenue. On the other hand, the railway is called upon to carry traditional low rated

essentials. As a national carrier, BR has obligation to carry essential commodities like food grains, fertilizer, jute, cement, coal, iron and steel. Container services During the year 2003-04, a total of 70,247 numbers of containers were handled at Chittagong Port and Dhaka ICD which were only 15010 in 1993-94. A total of 541963 tons of different commodities were transported in those containers, which contributed a total of Tk. 374,441,891 to the railway revenue. Increasing Demand: Increasing demand for transport is increasing the demand for alternative way with time effectiveness. Intercity service can resolve the matter. Safest mode of transport: Land use: Land requirement for rail is 1/4th of that for road based transport system for carrying comparable volume of passenger and freight on high density intercity and intra-city corridors. o Environmental consideration: rail is much more environment friendly (less pollution, less emission, less noise) compared to road transport. o Alternative energy use: rail can use electrical energy obtainable from natural gas available in the country where as road vehicle would continue to depend on imported fuel. o Container carrier: rail has already established role as a multimodal carrier of containers in the country. Sea-borne containers coming through Chittagong port and consigned to Dhaka ICD and viceversa use single unified shipping document. Recommendation The `Arterial Corridors' will be designated, as 'Strategic Corridors' and required investment will be made for their development and to raise them to international standards so that these can carry the regional and inter-regional traffic. The two Sea Ports will be further developed and linked to Dhaka by improved railways networks, which connects all the four major regions of the country. Railway linkages between the east and west zones of the country should be well integrated. Improvement in resource mobilization will be made through introduction of user charges and fees by the agencies.

Improvement of the management and operation of transport parastatals, including eventual privatization of some specific transport parastatals will be aimed at.

Provision of required incentive packages for the private sector for greater participation, not only in transport services, but also for infrastructure building will be made.

Identification and implementation of preventive, emergency and post-disaster mitigation measures will be made. To minimize accident, safety administration will be adequately strengthened.

Broadening the framework of transport development strategy by incorporating the vital urban transport dimension starting with improvement in transport services of greater Dhaka city will be undertaken.

Assurance of deficit-free operation of Bangladesh Railway as envisaged in Railway Recovery Program will be fulfilled. Introduction of necessary institutional reforms to address the operational constraints of the port transit system with special reference to containers and privatization measures for port transit system will be made. Adequate care will be taken while developing transport network and service so that these do not cause environmental pollution and affect ecological balance. Government should become more concern about future opportunities. It will help develop further with faster growth. Private sector can be encouraged. Good governance can make this sector more attractive.

Conclusion: Railway is a promising sector for Bangladesh to develop as a modern economy. This will enhance the quality, time effectiveness and batter option for the nation against the demand for new road. The cost effectiveness can be ensured and traffic system can be batter if the development can be done.

Reference: 1 Bangladesh Railway (2004), Information Book, Railbhaban, Dhaka 2 Bangladesh Railway (2003), Information Book, Railbhaban, Dhaka 3 Bangladesh Bureau Statistics (2001), Statistical Year Book, Dhaka 4 http://www.unescap.org