The Hindu Business Line : The Railways on a new, fast track

Known for his ready wit and quick repartee spiced with the usual rustic wisdom, the Railway Minister, Mr Lalu Prasad, has much to be happy about. Aided by his trusted Officer on Special Duty, he has achieved much in a very short time.

Not that the Railways did not have managerial talent, but the will to take any major step which would upset the apple cart had been lacking. Mr Lalu Prasad, on the other hand, had his basic instincts to guide him, and got the arithmetic done by the OSD, who was equally new to the game. They just went ahead and did what needed to be done — in double quick time. And the rest, as they say, is history.

Starting with an across-the-board hike in the carrying capacity of wagons, which only recognised the rampant overloading that was going on, he juggled around with the freight tariff, ensuring that he made the market pay what it could bear, while dropping rates where competition was intense. In the prevalent environment of witch-hunting and exposés by the media, a railway officer, as much as any bureaucrat, is bound to become extremely cautious in his decision-making process and is quite reluctant to stick his neck out.

Enabled managers

Mr Lalu Prasad has changed all that, with the managers now more willing to examine, test, experiment and adopt new procedures and technologies. All leading to a new work ethos and a totally changed mindset.

Encouraged by the highly satisfactory results of using a 50 per cent mix of CNG and diesel oil on a DMU (Diesel Multiple Unit) running on the Delhi-Shyamali section, the Railway Board has taken the bold step of converting 100 such DMUs at a rough cost of Rs 75 crore, which would pave the way for large-scale conversion of all main line diesel locomotives in a phased manner. On an average, 30 per cent saving in fuel cost is expected, which should help improve the Railways' bottomline in years to come.

Some eager beavers at the new zones, such as the South Western Railway, with its headquarters at Hubli, have simply gone ballistic and chalked up an impressive growth in both parcel and freight business.

Aggressive marketing has enabled the Railways to capture the transport contract of Toyota cars from the Bidadi plant destined for the northern region. On an average, five 24-NMG (New Modified Goods) wagon rakes have run from Bangalore to Delhi, every month, carrying about 100 vehicles each, earning the Railways Rs 13 lakh per rake, while saving about Rs 9,000 on each car.

It has been a similar win-win situation vis-à-vis the TVS plant at Hosur that has managed considerable cost saving by transporting about 65 two-wheelers in each NMG coach and dispatching, on an average, two rakes per month to destinations up north and east.

Marketing strategy

Though a separate marketing arm had been created with much fanfare on all nine zones more than four decades ago, its approach had been no different — that is,"we don't go chasing it, the business will come to us."

Innovation was conspicuous by its absence and any attempt beyond the mandatory quarterly traders meet was not encouraged. Moreover, except for generating bonhomie, such meets did not translate into deals where the Railways emerged as the preferred mode of transport.

But a paradigm shift has now happened with the monolith organisation leading the charge. Now, in a move of far-reaching significance, a Freight Marketing Control Room has been set up, which plans to coordinate marketing forays and strategies on an all-India basis.

So much has improved that Tata Steel is said to be thinking of entering into a long-term agreement with the Railways for transport of finished steel; this could significantly improve its bottomline. This is a key indicator thatfor the Railways, the customer has become the boss, and this augurs well for its continued growth and financial health.

(The author, a former Member of the Railway Board, can be contacted at acharya@bol.net.in)