Sunday, July 6, 2014

The Railways need surgery

S. Pushpavanam

It needs fresh investment, and change of tack

A passenger who travelled overnight by sleeper class got down in the morning from the Tirunelveli Express with a bleeding ear lobe thanks to a rat’s mischief, newspapers reported. We have been reading reports of luggage being chewed up, rat carcasses being found, and rat traps being deployed in passenger compartments.
It’s not safe on our Railways. There were four railway accidents in which 51 lives were lost over the last three months. The H.R. Khanna Committee (1998) recommended that the Chairman and members of the Railway Board and heads of departments be made responsible for standards and safety. The Board rejected this recommendation and pushed accountability out the door.
What is causing the deaths are not old rails or worn-out signal systems or inefficient drivers, but the attitude of the 14-lakh-strong workforce which believes the Railways exist for them; passengers can be just tolerated and permitted to use the services.
All this points to monopolistic abuse. Why did we abolish monopoly in the insurance, airline, broadcasting and telecom sectors? Because it is inherently bad, inefficient, and loss-making. It is anti-competitive, wastes national resources and offers poor service to the user. Why should the Railways, the only surviving monopoly, be allowed to eat into the vitals of the nation?
The Sam Pitroda Modernisation Committee said at least Rs.5 lakh crore will be needed to modernise the Railways. The Railways’ own status paper says at least Rs. 100,000 crore is needed to execute sanctioned projects. The Anil Kadkokar Committee determined that at least Rs.1 lakh crore is needed to ensure safety. Add these up, and you need Rs. 7 lakh crore to run the Railways reasonably well. Unless such investments are made, people will continue to suffer and die.
Corruption has spread. When a member of the Railway Board attempted to bribe a former Union Minister of Railways with Rs.10 crore in order to become Member (Electrical), a position that evidently had the potential to earn several times the ‘investment’ made, it exposed the cancer at the top. Bribe-givers always recoup their money.
Needed, accountability
Accountability is tough to enforce in monolithic structures. The Railway bureaucracy has multiplied without regard to the workload. Five zones became 16 zones — and there was a corresponding escalation in the number of high-level posts. But there is nothing to show all this has resulted in better safety or efficiency or cost-effectiveness.
In 1992, the workforce was 1.5 million. Now after 22 years of electrification, modernisation, computerisation and mechanised track maintenance, the figure is 1.4 million. The staff cost in the 2013-14 budget accounted for 54 per cent of total expenditure. In 2011-12, it was 59.18 per cent with the employee wage bill at Rs. 58,680 crore (excluding casual and temporary employees), and the total expenses were Rs. 98,677 crore. This is unconscionable.
The Pay Commission recommended the removal of “bungalow peons”. The officers accepted the higher pay levels that were recommended and retained the peons, who number 1,800. The CAG recommendation on manpower reduction at the rate of 3 per cent a year has been ignored. The operating ratio, which has been around 90 per cent, ought to rise above 110 per cent.
What, then, must we do?
Turkeys hate Christmas, and bureaucrats abhor reforms. But the national interest demands major surgery.
Reduce the number of zones to five and convert them into corporations. Disinvest. Sell or lease Railway land. Use the network to start a telecom service and compete with other service-providers, or lease them. With the money raised, offer an attractive voluntary retirement scheme. Remove the deadwood. Retain the talented and motivated. Go in for a massive loan. Bring staff costs down from 53 per cent to 43 per cent to begin with, and to 30 per cent in five years. Virtually all work has been mechanised or automated. You do not need the manpower levels you needed 20 years ago.
Other railways incur only a fraction of the cost to run more passenger kilometres than the Indian Railways handles. Stop building quarters: anyway nobody seems to want to stay in them.
Publish the names of staff members against whom Central Bureau of Investigation or vigilance action has been taken. Name and shame them. This is one way to curtail the corruption.
Once you create the corporations, go for either foreign direct investment or domestic investment. Fix standards and accountability for cleanliness, punctuality, safety, efficiency and comfort.
If you do all this, the Railways will turn around. A committee headed by E. Sridharan would achieve what is thought to be impossible. Indecisiveness need not be India’s misfortune forever.


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