Financial Daily from THE HINDU group of publications
Monday, Jul 22, 2002
Columns - On the move
Creation of new railway zones How will rail users benefit?
A LOT has already been said, discussed and debated over the Railway Minister, Mr Nitish Kumar's decision to create seven new railway zones to bring the total number of zones to 16. The issue has even led to a political tussle between two States, with several political parties with axes to grind throwing their hats into the ring. This is not surprising when a decision is taken on the grounds of political expediency, throwing economics to the winds.
Several vital questions remain unanswered in the welter of arguments and counter-arguments. These are: How is the creation of new zones going to benefit the rail users? What can the users hope to get out of the zone-creating exercise? Will they get comfort and better service? Will there be a drop in passenger fares or freights? Or timely running of trains? Or more trains and faster trains? Better efficiency?
Predictably, there are no answers to these questions. As everybody knows, the decision on new zones has been taken not with an eye on the interests of the users but to serve the interests of a section of politicians. As a result, neither the users nor the Railways can hope to benefit from what is being called "Hajipurisation of the Indian Railways". If anything, there will be no increase in revenue earnings as a sequel to the creation of new zones while the costs, both fixed and variable, will go up. True, the creation of new zonal headquarters, the construction of offices and other facilities will be one-time investment. But there will be high recurring costs, not only by way of the maintenance of new set-ups but also by way of the additional recruitments to be made.
Since the Group C and Group D employees cannot be transferred from their existing positions, there will be fresh recruitments in these categories maybe at the rate of 1,000/ 1,500 per zone. These recruitments will take place at a time when the Railways is already saddled with a total workforce of 1.5 million.
Today, the total salary bill, together with pension, account for a whopping 60 per cent of the IR's total revenue earning, leaving a meagre 40 per cent of the earning to take care of all other expenses, including on track and bridges, their renewal and maintenance, procurement and maintenance of locomotives, wagons and coaches, cost of fuel, construction and maintenance of fixed assets like station buildings, colonies, schools, hospitals and workshops. No wonder the Pay Commission, while granting a quantum jump in salary, emphasised the need for pruning the workforce to 400,000. But, then, who cares when the decisions are taken for political expediency?
The examples of political expediency are many. Hubli in Karnataka has been chosen as the location for a new zone. But the adjacent Guntakal division in Andra Pradesh, thanks to the pressure mounted by the Andhra Pradesh supremo, has been allowed to remain within the South Central Railway Zone, with headquarters in Secunderabad. What the Asansol division is to Eastern Railway, the Guntakal division is to South Central Railway. The loss of Guntakal will mean loss of substantial freight traffic. Sensing this, the Andhra Pradesh Chief Minister pulled his strings and got what he wanted.
Another example. Allahabad and Lucknow are located in close proximity. Allahabad will be the location of a new zone. However, despite proximity, Lucknow will continue to be under the Northern Railway. We can guess why.
The Railways do not need new zones to lay new lines, repair the existing ones or to modernise the workshops or run trains on time. After all, the allocation of resources is centralised. In fact, fewer zones might be preferable. This is because more zones mean more checkposts, which stand in the way of faster movement of trains and their smoother operations. Ensuring a proper coordination among existing zones is proving to be a Herculean task. The monitoring, which is now being done from Delhi, will be rendered even more difficult with the emergence of more zones. The creation of new zones could also generate forces, raising the demand for the constitution of regional railway boards.
What is causing concern to many is that the present exercise might prompt many States to demand more zones, such that eventually there is one zone for each State. Nothing can be more unfortunate than this. The Railways, like the Defence forces, have been the single largest unifying force in this faction-ridden country. Right now, one zone serves more than one State. For example, South Eastern Railway has its operation spread across seven States. If this character of the Railways is sacrificed at the altar of limited political gains, then regionalism might rear its ugly head. The investment decisions of the Railways, already suffering from various distortions, will be the victim of further distortions.
The need of the hour, therefore, is not to fritter away the Railways' scarce resources on small and not so small unviable projects on political considerations. Instead, for strategic reasons, much greater attention needs to be paid to create better rail links with the North-Eastern States and Jammu & Kashmir. In both these regions, a very large section of the population feels alienated from the mainstream for a variety of reasons. What better way can there be of bringing them to the mainstream than establishing proper rail links with these regions? Sadly, the powers-that-be have a different agenda.
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