1. Editorial: Another Kayakalp doctor

Editorial: Another Kayakalp doctor

There are now 3 panels on how to fix the Railways

By: | Published: March 21, 2015 2:41 AM

Getting a fix on how to fix the Railways is very important considering its steadily deteriorating finances over the years and near-complete inability to finance the money it needs to both grow its network as well as make it safe—the Anil Kakodkar committee had estimated the Railways need R1 lakh crore for just its safety needs. At an overall level, the Rakesh Mohan panel had estimated it needed R14 lakh crore of investment over the next decade. And, it has to be said to railway minister Suresh Prabhu’s credit, that he has made a good start. The Railways lost R34,928 crore on passenger carriage in FY15, taking its social obligations up from around 9% of gross traffic receipts in FY01 to over 21% in FY15. This cannot be fixed overnight, but after the 14% hike in passenger fare after the NDA assumed office, Prabhu has pencilled in another 10% hike in FY16. And apart from getting the government to help fund around 40% of the capex for the year and another 17% each from internal accruals and market borrowings, Prabhu plans to tap other sources for the balance—he already made a start by signing an agreement with LIC a few weeks ago.

Given this, it is not clear why Tata Group Chairman Emeritus Ratan Tata has been asked to head the innovation council, Kayakalp, whose job is to help do ‘business re-engineering and introducing a spirit of innovation in Railways’, to quote from Prabhu’s Budget speech. Tata is a great name to have as an advisor, but similar high-profile names have failed to turnaround ailing PSUs where the government did not have the will. And, in any case, apart from the Rakesh Mohan report, the Railways has a report on its restructuring being submitted by Bibek Debroy at the end of the month, and there is another committee under former DIPP secretary Ajai Shankar on how to revamp the PPP cell to get large private investment in, and there is a white paper along with this year’s Budget that offers solutions like involving customers (like coal and ports ministry) to build railway lines, getting more PPP and FDI, utilising 46,000 hectares of vacant land, developing railway stations to include commercial space, etc. And the Debroy committee, our front page story points out, is proposing revolutionary changes. Not just stopping the presentation of the annual Railway budget, but ensuring the central and state governments pay for the subsidies for passengers on central and suburban trains, linking subsidised tickets to Aadhaar numbers and getting private sector firms to run trains—for the latter to happen, Debroy proposes the track and signalling functions be hived off to an independent entity. Whether this will be accepted remains to be seen, but with all the plans he has, Prabhu doesn’t need to add another ‘ratan’ to his list of advisors.

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