Sri Lanka’s railways can’t run on ticket fixes alone

By Dhananath Fernando

Originally appeared on the Morning

The Deputy Minister of Transport has earned much praise on social media for streamlining the online ticket booking process, especially for scenic train journeys like the one to Badulla.

The change is simple but effective. Moving forward, the name and ID card or passport number used to purchase a ticket must match the person boarding. Authentication will be checked before you step on the train.

This intervention is commendable. But in economics, problems rarely end at the surface. This ticket issue is only a symptom of something much deeper.

The root problem is a classic demand-supply mismatch. When tickets sell out within minutes, only to appear in the black market at two or three times the price, with buyers still willing to pay, the signal is clear: demand far outstrips supply. One way to fix this is to raise prices so that limited resources (in this case, train seats) are allocated more efficiently. The other way is to increase supply so that more people can enjoy the ride.

Sadly, our current system does neither. The result? A thriving black market. Even with the new rule, there is still room for ticket manipulation at the gate. Ticket checkers now have the discretion to allow someone onboard whose details don’t match exactly and when there is scarcity, that discretion can be monetised.

Consider the plight of a tourist agent. A train ride from Colombo to Ella is often a must-have in a Sri Lanka travel package. But with no forward booking option, agents can’t guarantee it until clients confirm. Tourists, being tourists, change plans. Some may decide on the ride after they land. Without flexibility in the system, we simply miss out and so do hotels, tuk drivers, and restaurants along the Ella-Badulla route.

The Deputy Minister’s action fixes a short-term loophole. A lasting fix means addressing supply. That requires running more trains to Ella, catering to different market segments with different service levels. But to do that, we must partially unbundle Sri Lanka Railways. Maintaining the track is a different skill set from operating engines, which in turn is different from managing passenger services. Station management and facilities are yet another field.

These can be run by separate entities – some public, some through public-private partnerships. Multiple operators would naturally compete to offer better booking systems, more frequency, and pricing that reflects demand. The result? Convenience for passengers and new economic activity along the line.

Sri Lanka Railways is no small outfit. It employs around 14,000 people and carries more than 300,000 passengers every single day. If the facilities were improved with faster services, cleaner stations, and reliable scheduling, that number could grow significantly. What we provide now is only the bare minimum of what is possible. With proper investment and reform, the railway could move far more people, cut road congestion, and become a competitive transport choice rather than a last resort.

And yet, we have barely touched another major opportunity: cargo transport by rail. Right now, the railway’s contribution to freight movement is minimal. This is a missed economic opportunity.

Moving goods by train is cheaper, more energy-efficient, and takes pressure off our congested roads. Properly developed, a modern rail cargo service could connect ports, industrial zones, and inland markets, cutting logistics costs and boosting trade competitiveness. It is a market just waiting to be tapped if we have the vision and the reforms to make it happen.

There is also an untapped goldmine in land assets. Sri Lanka Railways owns some of the most valuable land in the country, much of it in high-value urban and tourist areas. Train access makes these lands even more valuable. But under the current Railways Act, long-term leases are near-impossible. That means this land sits idle, locked away from productive economic use.

Meanwhile, the railway bleeds money. Between 2010 and 2020, it lost roughly Rs. 300 billion. Losses in 2023 alone were Rs. 11 billion, and in 2022, Rs. 12 billion. This is unsustainable not just for the balance sheet, but for a country already straining under heavy public debt.

This is not a story about ticket booking. It’s a story about how poor reforms, lack of competition, and outdated laws have drained resources from a sector that should be a profit centre for the Government and a vital artery for public transport and cargo movement.

If we keep patching the symptoms while ignoring the disease, the losses will keep mounting, the black markets will keep thriving, and the opportunity for Sri Lanka Railways to be a driver of growth will remain stuck at the station. The choice is ours: keep running on the same broken track, or reform the system so that our trains carrying both people and goods can finally pick up speed