Why can’t privately run trains make profits?

It is unfortunate that Bangladesh Railway (BR) has not been able to make much progress when it comes to getting the customer trains operated by private firms and making profits. According to a working paper submitted by the railways ministry to the parliamentary committee, the agency is incurring huge losses as privately run passenger and freight trains have failed to make any profit in the last three years. According to a report published by this daily, for every kilometre an individual travelled by train operated by private firms, BR spent Tk 2.43 and earned Tk 0.62, incurring a loss of Tk 1.81. And when it comes to transporting goods by freight trains, BR is also counting a loss of Tk 5.76 for each tonne of goods carried for each kilometre.

The data presented by the railways ministry, however, lacked details—for instance, they could not provide the income and expenditure of each of the 40 trains currently being operated by private firms. While the paper mentioned that the trains earn over Tk 98. 61 crore a year, it did not say how much money is being spent to operate them. As the issue was discussed in the national parliament on Monday, the Parliamentary Standing Committee on the Ministry of Railways expressed dissatisfaction for presenting such an incomplete report. And rightly so. How could the parliamentary committee learn about the actual situation if the ministry provides fragmented data? Does it not expose the inefficiency with which the ministry prepares these reports?

What is the point of allowing private firms to operate the trains if they fail to make any profit? And what measures can be taken to make them profitable again?

Reportedly, BR has been incurring huge losses for the last 12 years despite receiving massive investments from the government. According to a ministry document, the transport agency incurred a loss of Tk 2,086.70 crore in the fiscal year 2019-20. And, as per the data of the Bangladesh Railway Information Book-2020, the agency has not made any profit since FY 2008-09.

   Against this backdrop, we think the BR needs a massive overhaul to right the wrongs done by the organisation. It is true that it cannot be turned into a profitable one instantaneously, but if corruption, mismanagement and poor services can be checked and a culture of accountability established, it can definitely be turned into a profitable transport agency soon enough.