The government-owned Bangladesh Railway (BR) which traces its origin to the British period of governance in this region, is presently a neglected medium of transportation . But it could retain its previous position as the more sought after means of both passengers and cargoes provided it was run efficiently. However, efficiency is far removed from railway’s operations in Bangladesh. Thus, the once major transporter of the country is, today, a frail figure compared to its robust past. Lack of modernisation has led to this state of the railways when with timely reforms, restructuring and addition of capacities, BR could be an invigorated organisation discharging cost-efficient services for the economy while operating without losses.
Ever since the creation of Bangladesh, BR was treated in a step motherly way. Nearly 85 per cent of the public development budget in the transportation sector were spent on developing the road networks. This fund denial for development, plus the fact that hardly reform activities were carried out in BR, has created this situation when the BR has become a sick entity when, ironically, it should have been the favourite medium of transportation for different stakeholders and for its other in-built advantages.
For examples, expansion of railway networks involve less land acquisition than for building roads. This is a big plus point in a land scarce country. Railways are also safer than roads where nearly 2 % of the gross domestic product (GDP) are lost annually from road accidents. Railways also generate significantly less pollution than roads and are, thus, environment friendly. Specially, as the bulk carrier of goods, commercially, railways provide the cheapest mode of haulage of goods for business operators. Transportation of containers by rail from Dhaka to Chittagong, for instance, is found to be substantially lower than such transportation by lorries through roads.
Considering all of these factors, railway’s development should be a top priority for the government. Apart from channeling greater public funds for BR’s development, government should take prompt actions to utilise external assistance which are on offer from different donors bodies for the same purpose. Simultaneously, BR should be turned into a corporate body with the government not giving up control over it but making its relation more flexible with the government by leaving its day to day operations to autonomous but accountable officials for taking decisions and running the new corporate entity on commercial lines.
A corporatized BR should be able to set freight tariffs on its own, enter into bilateral discussions with major shippers, and adjust and improve pay levels and incentives for employees. Because of their sensitivity for the public, governments usually retain the right to set passenger tariffs, and often fix these tariffs below cost recovery. When government sets prices below cost recovery, it is essential that government compensates the railways for any resulting losses, via a transfer from the budget.
Besides, there is also another very important side to developing the railways. With the establishment of deep sea ports and other steps taken to increase port capacities, Bangladesh may be expected not only to carry its increasing cargoes but also that of other neighbouring countries. The need will arise then, which can also be seen as an economic opportunity, to earn a great deal as a regional transportation hub. But this vision will not be realised without strengthening transportation related infrastructures ; specially the railways will need to be developed.
