With Vinod Rai, the former Comptroller and Auditor-General, heading a committee to suggest ways for infusing more transparency in the railways — the sixth committee in the last two years, the railways could well become the most studied infrastructure in the world. Required to give railway minister Suresh Prabhu a roadmap for the next five years, Mr Rai will be following in the illustrious footsteps of Dr Kakodkar, Sam Pitroda, Bibek Debroy, E. Sreedharan and D.K. Mittal.
While the going is good, it’s time for another committee that could establish what went wrong over the last two decades. And what turned the railways from a financially sound entity into a virtual basket case having to seek handouts from the Central exchequer every year. There is an urgent need to discuss what the railways should not do.
Learning from past mistakes, the proposed committee could recommend as to what Mr Prabhu should “not” do. Undoubtedly, populism needs to be avoided at all costs. No new trains should be introduced as this will prevent further crowding of railway tracks and will also allow freight business adequate room to grow.
Similarly, new projects, unless it directly contributes to increase in freight carrying capacity of the system, should be avoided.
In more than two decades of unbridled populism and financial profligacy, political heavyweights of various hues have lorded over the vast resources of the 1.4 million strong behemoth with a turnover exceeding Rs 1,40,000 crore. Also, it is often seen that in the name of discharging the railways’ social responsibility, politicians have dispensed favours ranging from building a foot-over bridge to giving sanction to a new multi-crore project. A majority of such favours are unremunerative.
For example, a decade back, the creation of eight new rail zones in one sweep almost doubled the existing zones from nine to 17. This led to piling up overheads without any commensurate addition to freight or improved efficiency. In fact, it only fractured the existing command and control structure. The railways also need to avoid any major hike in freight tariff, especially halfway through the financial year as it upsets business plans. Also, in the recent past, it has caused loss of substantial high-value market to the road sector.
Some 400 odd projects, estimated to cost Rs 1.85 lakh crore, are already in the pipeline. A discussion with various stakeholders is vital to ensure that such projects don’t become a burden. They should either be dropped, which is a highly unlikely scenario with our existing political class, or funds should be mobilised through public-private partnership, or the state should fund it partially to ensure their completion in the next five to 10 years.
Tinkering with the existing structure, including corporatisation should be avoided. This could be done once the railways’ finances are in good shape. Also, Mr Prabhu should aim for an early completion of both the eastern and western sectors of the dedicated freight corridors and its linkages to facilities coming up in Delhi-Mumbai Industrial Corridor (DMIC).
This would not only lead to a quantum jump in freight business. An yearly inflation-linked hike in passenger tariff to get this booming business to start paying for itself and not remain a burden on freight earnings would also be in order.
Presently, the manpower accounts for nearly 50 per cent of the railways’ expenditure. Planning an annual five per cent increase in productivity in operation, maintenance of assets, manufacturing etc. by adopting better management practices, mechanisation of various activities and adoption of new technologies is advisable.
Mr Prabhu has already announced that a masterplan for capacity enhancement in various critical areas to sustain railways’ growth and other vital managerial inputs is under preparation. To be tabled on the floor of Lok Sabha in his maiden Rail Budget, hopefully this commitment will then not be subject to the vagaries of successive ministers.
Taking a cue from Prime Minister Narendra Modi, who has disbanded all GoM and EGoMs to ensure a quick and accountable decision-making, Mr Prabhu should go ahead and boldly dissolve all railway users consultative committees — 68 at divisional, 16 at zonal and one at the national level — that have been primarily responsible for generating hundreds of populist suggestions contributing to the railways’ poor financial health.
Mr Prabhu can ill-afford to delay getting the railways back in shape for the long haul, providing fast, clean and safe transport for people and freight at the lowest possible unit cost, regaining its place as nation’s economic life line.
The writer is a former
member of the Railway Board
