Railways Revenue Surges Amid Persistent Service Quality Concerns
Photo Collected
Bangladesh Railway’s Eastern Zone has reported a significant 1.5 billion taka increase in revenue during the first nine months of the current fiscal year compared to the previous period, largely driven by a surge in passenger traffic. Despite this robust growth, the railway continues to struggle with declining revenue in the freight sector, failing to meet its targets.
As of March this fiscal year, the Eastern Zone’s earnings reached 9.09 billion taka, surpassing its operational targets. This marks a substantial rise from the 7.59 billion taka earned during the same period last year. Passenger services accounted for 86.5% of the total revenue, while freight and parcel services contributed only 71.77 million taka, representing a mere 7.9% of the overall income.
The increase in passenger revenue stems from various measures, including new charges and the withdrawal of previous concessions. However, these financial gains have not translated into improved passenger services. Issues such as erratic train schedules, delays, frequent engine breakdowns, derailments, difficulties in securing seats despite valid tickets, and stone-pelting incidents on popular routes persist.
In stark contrast, the freight sector has seen a downturn, with revenue falling below last year’s figures and well short of its target. The railway is facing a severe engine shortage, significantly hindering its ability to operate freight trains effectively. This situation stands in opposition to global trends, where countries like neighboring India prioritize freight transport.
Comprising the Dhaka, Chattogram, Sylhet, and Mymensingh divisions, the Eastern Zone’s revenue disparity between passenger and freight services is notable, especially when compared to other South Asian nations. Indian Railways, for instance, generated 2.65 trillion rupees in the last fiscal year (2024-25), with freight contributing 1.71 trillion rupees and passenger services 753.67 billion rupees. This indicates that Indian freight revenue is 2.3 times higher than its passenger revenue. Similarly, Pakistan Railways earned 83 billion rupees in its last fiscal year, with passenger services accounting for 42 billion rupees and freight 29 billion rupees.
An analysis of railway data reveals that passenger transport is now the primary revenue generator, bringing in 7.87 billion taka, a 26% increase from 6.23 billion taka in the previous year. From July to March of the current fiscal year, 36.98 million people traveled by train in the Dhaka and Chattogram divisions, exceeding the target of 27.86 million by over 9.1 million passengers.
Railway officials attribute this surge in passenger numbers to commuters seeking alternatives to road transport, citing traffic congestion, accident risks, higher fares, and the desire for time efficiency. The opening of new routes, including one to Cox’s Bazar, has also contributed to the increased appeal of train travel as a safer and more comfortable option.
However, as passenger interest grows, Bangladesh Railway has implemented new charges and withdrawn previous benefits. In 2022, a 15% VAT was imposed on first-class non-AC coaches, which were previously exempt. Additionally, distance-based concessions—20% for 101-250 km, 25% for 251-400 km, and 30% for over 401 km—were abolished in April 2024. The railway also introduced a 30% charge on AC tickets and 20% on non-AC tickets for additional intercity coaches and reserved carriages. In December last year, a “pontage charge” was imposed on bridges longer than 100 meters, increasing fares by 5 to 226 taka per ticket, depending on the train and seat type.
Mahbubur Rahman, Chief Commercial Manager of the Eastern Zone, told a local newspaper that these measures, including adjusting ticket quotas to meet demand at various stations, were implemented to boost revenue and passenger volume.
Despite these efforts, the freight sector remains a significant concern, with revenue declining for 11 consecutive fiscal years, barring a brief recovery that could not be sustained. In the 2015-16 fiscal year, freight revenue was 73.13 million taka. While it surpassed 100 million taka between 2021-22 and 2023-24, it dropped to 77.53 million taka last fiscal year.
This year, freight revenue further decreased to 65.09 million taka from 72.31 million taka in the previous year, falling significantly short of the 227.08 million taka target. Parcel services generated 5.68 million taka against a target of 18.75 million taka.
Over the past 15 and a half years, more than 100 billion taka was invested in railway development, primarily for new line construction. However, a corresponding investment in new engines was not made, leading to an expansion of the network but a reduction in operational trains, particularly freight services. In the first eight months of the 2024-25 fiscal year, 1,838 freight trains operated, a number that plummeted to just 985 trains during the same period in the current fiscal year. This represents a nearly 50% reduction in freight train operations, with only 49,476 wagons transported against a target of 199,715, indicating a three-quarters shortfall.
The primary cause for this operational decline is a severe engine shortage. While an average of 13 engines are needed daily for normal freight operations, only three to four are available, sometimes even fewer. This disruption has led businesses to lose interest in rail freight.
Experts and railway officials attribute the “derailment” of the railway, despite massive investments, to flawed planning, corruption, inefficiency, and wasteful spending. A prime example is the acquisition of luggage vans. In 2023, 125 luggage vans were purchased for 3.58 billion taka, ostensibly to make the freight sector profitable. Instead, these vans have become a liability. Before their acquisition, parcel transport generated 21.6 million taka in the first three months of the 2023-24 fiscal year. After the new vans were added, revenue in the parcel sector for the first nine months of the current fiscal year only reached 66.8 million taka. Despite a capacity to transport 882 quintals of goods via luggage vans, only 286 quintals were actually moved.
Professor Md. Shamsul Haque, a transport expert at Bangladesh University of Engineering and Technology, commented to a local newspaper that the significant investment in the railway has not translated into improved services or increased passenger capacity, suggesting that the investment decisions were not well-considered. He noted that many railway purchases, such as the luggage vans, appeared designed to benefit suppliers rather than enhance utility.
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