1. Editorial: Restructuring Railways

Editorial: Restructuring Railways

Prabhu right, Board needs revamp to be effective.

By: | Updated: January 8, 2016 9:57 AM
Railway minister Suresh Prabhu is right in arguing that unless the Railway Board is revamped, it is going to be difficult for the organisation to become viable. (AP)

Railway minister Suresh Prabhu is right in arguing that unless the Railway Board is revamped, it is going to be difficult for the organisation to become viable. (AP)

Railway minister Suresh Prabhu is right in arguing that unless the Railway Board is revamped, it is going to be difficult for the organisation to become viable. It is, of course, true that the Railways incur around R30,000 crore annually by way of subsidies to passengers and, to the extent this is paid from the central budget, its finances will be better. The problem, however, is more deep-seated given the huge funds required for both fixing the safety aspects of the network as well as expanding it—in any case, it cannot be anyone’s case that all subsidies can be removed within just one year. In FY17, for instance, the R40,000 crore or thereabouts that the Railways will need to spend due to the Seventh Pay Commission—in a full year, the amount is R32,000 crore but this becomes due from January 2016—could kick the operating ratio to the 97-98% levels, leaving the transporter little funds for investment; even this year’s target ratio of 88.8% is likely to be breached since there has been a large shortfall in revenues already. It is to get a sharper focus that Prabhu has written to Railway Board Members, asking them for suggestions in the next two weeks on how to revamp the structure of the Board.

With such large tracts of land and commercial space within stations, and on trains, non-fare revenues should comprise at least 30% of the Railway revenues—this is the number former railway minister Dinesh Trivedi was aiming for, in keeping with the Japanese railway—but these are minuscule right now. But, and here’s the problem, were the Railways to contract advertising rights to a company in the manner the BCCI does with telecast rights for cricket matches, that company would have to deal the engineering department for permission to advertise on the railway platforms, with the electrical department so as to get connections for back-lit kiosks/billboards and the mechanical department if the advertising has to be taken on to trains. While Dinesh Trivedi had talked about a Member PPP to get over these kind of troubles, with 13 services within the Railways, many powerful departments function as independent silos, so it is not clear if this would have been the solution. After Suresh Prabhu spoke of the need to create dual-traction locomotives that could run on diesel where the tracks were not electrified, for instance, the battle between two wings of the ministry ensured the pilot project for 10 such locos was split between the diesel and electrical locomotive plants.

If the Railways is to able to meet changing consumer needs—apart from freight, even its share of short-haul passenger traffic is falling—it needs to be a lot more dynamic. That means each department—represented by powerful Members in the Railway Board—needs to work together. As Prabhu has said in his letter to the Board, “any theme that requires us to collaborate has languished … increase in average speeds, integrated use of Information Techology, integrated planning, etc”. Few successful organisations the world over function in silos, indeed while the Railways may want to preserve their 13 different services in order to impart some degree of specialisation, after a certain level of seniority, people have to be free to move across branches; most important, the Board has to be flexible enough so as to allow a quick organisational response to changes in customer demands/preferences.

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    Dr. Mohan
    Jan 8, 2016 at 6:03 am
    The observations made in the editorial are all facts and there is need to make the Railway Board functional giving flexibility at lower levels. As observed, there is need to revamp or change the structure or nomenclature of Railway Board. We need to compliment Mr. Suresh Prabhu, Hon’ble Railway Minister for his sincere efforts in these directions. One neglected area in Indian Railways is rat problem at rail premises and rail coaches. Number of reports exist on rat movement in rail coaches, especially air conditioned ones. Adequate attention is not paid to arrest such incidents. Even rats in rail premises can transmit about 30 diseases (health security) to pengers. As on now standard operation procedures are not even worked out by any agency. Fumigating rat burrows in rail premises and keeping sticky traps in rail coaches are only cosmetic actions and do not give relief. It is due to the habit of rodents (rats and mice) to move inside structures, coaches etc and also gnaw the wires to arrest the growth of their incisor teeth, which grow at 0.4 mm per day! As per a recent News Item, Delhi area rail stations are spending Rs. 10 crore to tackle rat problem! What about other areas is next question? It is high time Railway Board takes up the issue and get the SOPs developed before they award any contract to third party on their control.
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