The Train 18 / Vande Bharat Model

 

Add good passenger handling, and this is the model for replication.

Shyam Ponappa  June 1 2023

Vande Bharat trains get deservedly good coverage nowadays. They provide the model for goal-oriented team achievement that is possible in infrastructure. This process requires extension to aspects of user experience to complete the end-to-end system. It needs the complement of passenger handling for total service delivery, comparable to orderly boarding and disembarkation for airlines, or the system for voting booths.

A former member of the Railway Board describes the project as conceived, planned and executed in record time by a team of inspired, talented, and committed Railway professionals of the Integral Coach Factory (ICF) in Chennai.¹ Apart from the sanction by the then chairman of the Railway Board, A K Mittal, of two train sets budgeted at Rs 100 crore each, there was apparently little official support. These were completed on time, within budget.

 
Yet, just four years ago, after successful trials, the project was stalled by vigilance investigations that proved to be unwarranted against the leaders of the pioneering team of the “Train 18” project, later renamed “Vande Bharat”. The investigations found nothing, but the collateral damage was devastating for exceptional performers despite their being cleared of false charges.
 
Why “Train 18”? Because its champion, ICF General Manager Sudhanshu Mani, had 18 months left in service. His dream was to catch up on decades of established global practice at the ICF before retiring. The aim was to change the design of separate locomotives and coaches to a modern, single-unit train set capable of 180 km an hour without locomotives, with all power and service provision built into the undercarriage under the floor (for details see his book My Train 18 Story).

The ICF team rose to the challenge with good leadership, consultants, and vendor-partners, achieving what takes twice as long globally at half the cost. Successful trials at 180 km an hour of a train set with 80 per cent local manufacturing caught the Prime Minister’s attention, and two train sets began operation in 2019. The programme stopped abruptly because of vigilance action against the top team.²
 
The charges proved to be unfounded, and, after nearly three years, it seems as though the PM’s interest resulted in restarting the programme. Now, 18 train sets are operating as of May 25, 2023, with hundreds more planned. The performance of the trains occasionally elicits back-handed comments, such as being relatively slow (average speeds are more than 80 km/hour), that energy consumption is high, or that this would be nothing special in Germany, Japan, or China (the Financial Times)³, which is actually a compliment. The Vande Bharat is reportedly more energy-efficient than trains abroad, with average speeds on 14 routes published on April 20 ranging from 66 km an hour to 96 km an hour, with the median around 80 km an hour. By comparison, speeds on intercity routes under 300 km an hour in Europe in 2016 were as in the chart, with the median also at about 80 km an hour.

Reading Mr Mani’s book or watching his TEDx talk⁴ gives a sense of the degree of professionalism and teamwork that went into these outcomes. This is the achievement in terms of “hardware”. What of the passengers for whom it was made?

 
The design and manufacture of Train 18/Vande Bharat is exemplary for systems thinking and design, starting with the objective of a 180 km-an-hour train set with certain safety, quality, and comfort norms. The present emphasis on ramping up is promising. Yet more needs doing as always: Upgrading tracks to enable 200 km an hour at least, equipped with modern signalling, train sets with sleepers for longer distances, and barriers to prevent access to tracks. The scope and scale are monumental, and even more is needed beyond Vande Bharat for upgrading local passenger and intercity trains with better facilities.
 
Passengers who use these services do not have the benefit of an equivalent systems approach in their handling. The Railways have to take this step of setting the objective of convenience for passengers arriving at the station, embarking on these (or any other) trains, disembarking, and leaving the platform, to upgrade the customer experience hugely.
 
The process of embarking/disembarking on Vande Bharat trains is not organised. As the train is at the platform for a limited time, anxious passengers and porters rush to exit or enter helter-skelter. There appears to be no attempt to establish or maintain order. As for manufacturing, there need to be systems for passenger handling. Passengers arriving to embark on the train need a process, such as no well-wishers crowding the train, and queues instituted according to their coach number and seating order, half at the head end and half at the tail end of where each coach is expected to stop. Disembarkation needs to be managed first at both ends of carriages, with a clear passage to exit platforms. Embarkation needs to be arranged for each coach, such as having passengers from Seat No. 1 to the halfway number at the nearest doorway, and the other half at the farther doorway. With such procedures, passengers would have a much better experience with end-to-end services.
 
A systems approach in addressing train services for passengers is a paradigm worth applying with appropriate changes to other infrastructure and government services. The driving criterion needs to be clearly defined user-centric service experience, as against simply building more rail, or roads, or fibre networks. Processes need to be goal-oriented and require an end-to-end design of the hard and soft systems aspects as well their elements, followed by execution to standards, on firm timelines.

This template of goal-directed collaborative achievement deserves extension and replication in infrastructure and governance, using the talent and experience of such exemplars in providing leadership and guidance. There is then no need for overstatement, since the results will speak for themselves, as in the case of Train 18.
 

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Shyam (no space) Ponappa at gmail dot com

1. “Not by ‘Vande Bharat’ alone”.
https://www.thehindu.­com­/opinion/lead/not-by-vande-bharat-alone/article66786278.ece

2. “Controversies, vigilance probe bring Vande Bharat Express to a standstill” 

https://www.business-standard.com/article/economy-policy/vande-bharat-express-yet-to-leave-station-as-controversies-hit-project-119091601507_1.html

3. “India’s new railways project picks up speed.”
https://www.ft.com/content/77b1db06-4f 8c-4866-8f4a-4f489dce44cd 

4. https://www.ted.com/talks/%C2%ADsudhanshu_mani_the_j%20ourney_of_train_18

Decision Analysis for Interest Rates - II

India needs to make practical choices that prioritise growth Shyam Ponappa / Aug 02, 2012 A UN report last June stated: “…the increasing independence of central banks, tighter monetary policy, and inflation-targeting regimes, unnecessarily high — and sometimes, pro-cyclical --policy interest rates were probably one of the most important contributors to the worldwide slowdown in growth...”1 The economy is slowly grinding down as high interest takes its toll. While fear of inflation is understandable, demand-side resolve will not help our supply problems. Surely monetarists also see growth as being dangerously low for India, with its large, explosive, not-so-well-served, -educated, nor -prosperous population? Focusing on anything except growth as the highest priority is a mistake we cannot afford. Everything else depends on it, whether it is feeding people, clothing them, providing livelihood, sanitation, shelter, electricity, social stability, even law and order. My previous column (Business Standard, July 5, 2012) explained how lower interest rates could improve growth by increasing net profits. The purpose was to demonstrate the application of decision analysis through simulation, using financial process-flow logic. The question addressed was: what happens if interest rates are lowered in the present circumstances? Answer: profits would rise, reviving growth through higher income, employee compensation and taxes, with more savings and investment. Consider what might have happened. In March 2012, net profit was 8.8 per cent of total revenues for 2,840 companies.2 This would have risen to 11 per cent by June if interest costs fell 20 per cent per the example. With some reduction in raw-material costs, net profit could have risen further. What actually happened?  The RBI held firm, and net profit stayed about the same at 9.1 per cent (+0.3) for the quarter ended June (711 companies reporting by July 30, roughly 25 per cent). This was despite revenues dropping by about 3 per cent, higher taxes (0.4 per cent), and interest costs rising from 11.1 per cent in March to 17.3 per cent, as expenses dropped by 7 per cent with big cuts in inventories. Commentary Some issues in responses to the earlier article are outlined below, assuming an understanding of finance and awareness of economic history. 1. Straw-man arguments: Zero rate or 100 per cent debt Some readers asked, why not a zero rate? Answer: misallocation and lower productivity. Others asked, why not 100 per cent debt? Answer: bankruptcy risk. Still others suggested that providing support to business was not the only requirement. This is addressed above in growth being the highest priority. Reducing rates from current levels does not mean dropping to zero, nor ignoring prudential norms for debt/equity. Our goal is presumably sustained growth, not volatility with risk. Near-zero rates are known to create problems through misallocation, asset bubbles, and reduced productivity, e.g., in Japan, the USA, and the UK. However, Switzerland used low rates to tackle an overvalued currency in the late 1970s. Low rates induce a propensity to higher debt. This is because of a tendency to misconstrue the Modigliani Miller theorem, viz., that a firm is valued by the earning power of its assets and their risk unrelated to capital structure, to mean that high leverage has no adverse consequences. The lower the rates, the more the temptation to leverage, and the greater the risks. 2. The “correct” interest rate If rates were cut, what figure would be “correct”? Instead of a search for the perfect mathematical step, it is much more important to act in the right direction. Simulation helps to establish an appropriate range. Within that range, the rate is less important than that it’s a significant cut in these circumstances (1 per cent?), while not being too drastic. This is not a theoretical search for a perfect rate, but a pragmatic step to induce growth, for India to regain its investment destination status. The idea of a closed-form point estimate that is “correct” is misplaced, because correctness depends on circumstances, timing, and cultural/emotional/political responses, i.e., animal spirits. Simulation helps in exploring the range of probable outcomes for causal factors. Each factor has its own probability distribution, sometimes contingent on others (a Markov chain), yielding a range of probable outcomes, and not a point estimate. 3. The RBI intended to slow growth One view is that the RBI slowed growth in the hope of containing inflation. Therefore, criticising it for achieving the intended result serves no purpose. Surely the intention was not to slow to this extent? Other critical issues: Processes for growth -  Apart from lower interest rates, certain fundamental processes also need to be addressed with undiluted focus. These are goal setting, prioritisation, and coordination. a) Goal setting: Capital requirements India needs capital to grow, from both domestic and foreign investors. Paradoxically, growth is a critical prerequisite. If this is seen as greed or sophistry, let’s devise a better plan. b) Prioritisation:  Growth is the first requirement, as everything else depends on it. c) Coordination:  Effective coordination is the key to achieving growth. This is exemplified by the current state of electricity distribution, despite the addition of 20,000 Mw of capacity last financial year, mostly stranded, with the supply of coal supposedly being addressed, but without positive results. -  Real interest rates (and growth) In addressing these processes, one problem is conflicting information, for example on real interest rates. Does India have negative rates as some claim? The chart above shows World Bank data until 2011, with India’s generally higher rates. -  Food inflation (and growth) Food inflation is constraining interest rate cuts. The RBI’s statements and some commentators’ remarks lamenting that food inflation prevents rate cuts epitomise a misapprehension about supply and demand that sorely needs resolution. A recent study covering four states (Bihar, Punjab, Uttar Pradesh, West Bengal) suggests that rainfall drives agricultural output in Uttar Pradesh and West Bengal.3  The report concludes that supply side problems primarily affect food prices, not fluctuations in demand.  Add supply constraints from inadequate infrastructure and distribution processes, and it is clear that high interest rates cannot possibly solve the problem of food inflation.

                                                                                       

                                                                                           

                                                                                                        shyamponappa at gmail dot com

1: “The Scorecard on Development, 1960-2010: Closing the Gap?”, Mark Weisbrot and Rebecca Ray, June 2011:http://www.un.org/esa/desa/papers/2011/wp106_2011.pdf 

2: http://www.moneycontrol.com/earnings/ 

3: “The Curious Case of Indian Agriculture”, Nilanjan Banik and Basudeb Biswas, April 28, 2012:http://mpra.ub.unimuenchen.de/38634/1/MPRA_paper_38634.pdf

Comments

Posted by: Srinivasan	August 02 , 2012, 08:54 IST
Looking at just Growth and getting huffed up and puffed up on this single account is very myopic. What if we reduce and make a short-term weak recovery but throw the Indian economy into a tailspin over the long term! So my suggestion - develop stereoscopic vision look intensely at the drawbacks as well. With India having a currency devaluation of almost 15% recently (48 to 55.50), it will be dangerous to reduce rates as suggested by the author. In fact i would like to cry hoarse in return - If you want to save the Indian industry and economy, please raise the rates by 100bips! Now! Posted by: Rajesh August 02 , 2012, 08:38 IST Mr Ponappa says that low rates are risky but lower rates are Ok. He still leaves a cloud hanging over his arguments. Is 25bips acceptable risk and 100bps dangerously risky and 200bips Depressionally risky. It would take a moment to reduce rates but if the implications/harmful side effects are not mapped out precisely and properly we might have to repent at leisure for this hasty action. Serious work should have the look and feel of research and NOT give the impression of desperate policy sloganeering.   Posted by: Rajesh August 02 , 2012, 13:35 IST 1st sentence should read - Mr Ponappa says that, Lowering rates is Ok and in fact desirable, but lowering rates beyond a threshold might become counterproductive and quite risky. Posted by: Akhil August 01 , 2012, 22:56 IST No need to get worked up. This growth decline is the direct result of reduction of crony capitalism because of the pressure of media attention. This is especially true of the mining sector. Govt should focus on reviving crony corrupt capitalism which favors Big Business houses and ignore the people. As soon as the extraction mega profits get logged the growth figures will also start showing a distinct improvement. Handing mines on a platter at no cost provides the great incentive to miners who then extract as fast as possible. Which improves growth even if public assets had been handed out for a pittance. Posted by: Vivek August 01 , 2012, 21:47 IST In view of the currency devaluation should we not instead be raising rates? I think a more sophisticated and comprehensive analysis of the situation should have beeen made by Mr Ponappa. It is not as if the RBI is peopled by dumb no-brainers. They are smart and are aware of all the simplistic arguments advanced by Mr Ponappa. And yet have to balance it with other equally important concerns.