Rail reform: stick to the right track

The Government has appointed yet another committee to look into the issue of restructuring Indian Railways. ‘When in doubt, form a committee’ has been the mantra followed by politicians who, with minimal knowledge of the ministries they head, need someone or the other to guide them in formulating policies and drawing up a road map.

The last such exercise in restructuring, done by Rakesh Mohan in 2001, recommended ‘corporatisation’ as the panacea for all of the Railways’ ills.

Unfortunately the vital issue of whether the Railways should become a commercial entity generating profits to finance its growth, or continue to be a vehicle for economic and social development with the Central exchequer footing the bill, was never fully addressed. Moreover, an ownership structure that gives government-nominated directors unbridled power without accountability, while professionals running the corporation are held responsible for the results, is hardly the way to go.

The problem is not about who the owner is, but whether the owner is willing to take the responsibility. Creating an arms-length relationship between the Railways and the Government would be ideal, but will the minister and babus of the Ministry of Transport under which the proposed Railway Corporation would function, be prepared to accept it? Not likely!

On the job Moreover any organisation needs a CEO who calls the shots and takes the rap if things go wrong. This crucial role has all along been performed by the Chairman Railway Board (CRB) who, though first among equals of a seven-member board, was ultimately responsible for the smooth functioning of the 1.4 million employees-strong behemoth.

The vital task of selecting managers for 67 divisions, general managers for 16 zonal railways, 5 for the production units and 7 other posts of equivalent rank is the CRB’s prerogative, though he/she may consult other members.

Responsible for translating policies into action, these are field commanders of an organisation which is 24x7 at work, ensuring trains run come hell or high water, carrying 23 million passengers and 3 million tonnes of freight every day.

Perhaps Madhav Rao Scindia was the last Rail Minister who understood and made full use of this arrangement, seldom interfering with the Railways’ day-to-day working. His ‘golden’ era saw the introduction of a string of inter-city trains, namely the Shatabdi expresses, and a state-of-the-art computerised passenger reservation system which in July this year created a record by issuing almost five million tickets a day from its 11,127 terminals located at 3,257 stations, and ‘online’ bookings.

Jaffer Sharief, who followed Scindia, came armed with prior experience in an earlier stint as Minister of State for Railways. Inducting a railway officer as his private secretary, he soon set about milking the organisation through his much touted uni-gauge project, which put the Railways firmly on the path to financial ruin.

Over the last two decades, successive Rail Ministers have tended to assume the role of the CEO, with their respective personal secretaries often issuing orders on behalf of the minister.

Overly populist Unfortunately, given the vast resources available with the Railways and its efficiency in executing orders, their populist agenda got a free run.

Announcing hundreds of new trains, stopping superfast trains at the home towns of MPs and MLAs, multi crore projects — most of them financially unviable — and other freebies became routine, resulting in the Railway’s operating ratio plunging to an all-time low of 92 per cent.

‘Divide and rule’ became the mantra and with the chairman being effectively sidelined, even some board members began lobbying for projects and other inputs for their respective departments, in order to grab the maximum share of the budget pie. ‘Departmentalism’ soon became the order of the day, and providing rail transport at the lowest possible unit cost became a lost cause.

The latest fiasco of ‘cash for posts’ during Pawan Kumar Bansal’s tenure was one such example of a vendor trying to influence not only the outcome of a tender, but slotting a key board member who would be favourable to their overtures.

Hopefully, the latest committee on ‘Restructuring of Railways’ headed by Bibek Debroy will address the vital issue of providing authority with accountability, with the primacy of the CRB as CEO being fully restored.

The writer is a former member of the Railway Board

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