August 23, 2017   
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Transforming Railways


By Dhurjati Mukherjee

The recent Cabinet approval to set up an independent regulatory authority augurs well for the Railways, which has for quite some time facing severe financial problems. The authority would recommend revision of tariffs and passenger fares, which successive Governments have shied away from taking as unpopular decisions, forcing the Railways to bear loss of around Rs 36,000 crores every year in subsidising the passenger segment. The regulator, Railway Development Authority, is expected to lay down principles for determining tariff in passenger and freight segments.

The regulator will also ensure fair play and a level playing field for private or foreign players. Private investment in the Railways has been low due to uncertainties and frequent policy changes. As such, it is also expected to frame principles on subsidy or social service obligations benefitting the aam aadmi as the higher income group will have to support services for the common man.

It is understood that the authority may additionally be empowered to make suggestions on policies for private investment to ensure reasonable safeguards to PPP investors and to resolve disputes regarding future concession agreements. There can be no denying there is ample opportunity for private sector participation in this sector through modernisation of stations and building rest houses on railway land, support in running special trains for high-end and foreign tourists etc.

Railway resources need to be increased at any cost so as to carry out various modernisation and development plans, the most important being track renewal and constructing more lines to facilitate easy and faster movement of trains.

Meanwhile, the CAG has asked the Railways to revise passenger fares and curtailment of passes to recover its operating cost in a phased manner, as per its latest report placed before Parliament. It also urged the Railways to improve productivity, which has been deteriorating over the years and very rightly urged the national transporter to initiate effective measures to keep stringent check on cost escalation.

With operating costs increasing, the Railways have not been able to recover operational cost of passengers and other coaching services. The CAG report revealed that there was a loss of Rs 33,821.70 crores on passenger and other coaching services in 2014-15, which has obviously increased presently.

As is well known, over 80 per cent of the profit from freight traffic has been utilised to compensate the loss on operations of passenger traffic. Such huge diversion of funds through cross subsidisation cannot obviously continue for long and there is need for some fare restructuring. However, raising fares of lower classes cannot be done easily as the EWS and lower income groups use Railways frequently.

Apart from utilising funds judiciously and checking projects from lying idle and incurring interest liability, there is also a need to generate funds from other sources. These have already been pointed out such as from utilisation of railway land, leasing out stations to private parties and increasing all-round efficiency and productivity.

It may be mentioned here that under the PPP, 25 of the country’s most prominent railway stations would be auctioned at a minimum investment of Rs 30,000 crores. Among the stations the Government wants refurbished are Bengaluru, Pune, Visakhapatnam, Howrah, Allahabad, Bhopal, Indore and Mumbai Central. Many of these serve as terminal points or key junctions for both inter-city travel and suburban services.

Diverting resources to Modi’s pet project, the bullet train, is not needed at this juncture. Even providing wi-fi facilities can wait. The urgent priority is to concentrate on upgradation and maintenance of tracks to increase speed of premier and super trains, whose running is slow by global standards, and also construction of freight corridors. Railway Minister Prabhu has stated: “In the past two years, we have sanctioned 14,000 km of doubling of tracks and work is underway”. This would obviously boost up trains’ speed and efforts should be made to maintain an average speed of around 120 km per hour for express trains.

The Railways has to aspire to be professional unlike most government organisations, where it is missing. There is need for strictness in ensuring ticketless travel is completely banned and no one is allowed to enter stations without platform tickets. This would help in raising revenues and curbing the deficit in passenger tariff. In fact, accountability has to be fixed for those at the top than in the lower cadres.

An important issue that has hogged the limelight is the late running of trains which should be investigated by a team of experts and remedial steps taken thereof. Politicians and even bureaucrats do not give attention to this aspect as they are accustomed to air travel. It is the common man who suffers. The focus on railway modernisation should not be aimed only for the few who travel in AC classes but for those who travel ordinary. The concept of ‘dynamic fares’ has already raised fares in the upper classes and it is generally agreed that further hike of fares can only be carried out by providing better facilities.

In this connection, mention may be made of improving sanitation in the lower classes and ensuring cleanliness and adequate water availability, which in most trains have been abysmal. If necessary, a small charge may be levied towards implementing ‘Swachh Bharat’ on long distance fast and super fast trains.

One cannot deny that the challenges faced by Indian Railways are indeed enormous and there is need for complete transformation of the operational machinery to ensure better and more efficient functioning.  How far the Central and zonal administration can do so, remains to be seen. It may be mentioned, that the 2nd Administrative Reforms Commission (ARC), which was accepted by the Government had recommended that ‘Social Audit’ would become mandatory once a year for all organisations that have public interface to assess their efficiency and there be a grievance redressal mechanism. Though the Railways is possibly the biggest organisation that has public interface such audit has not yet been started!

Apart from this, innovative reforms such as redevelopment of stations are needed to maintain a balance with the finances available and the possibilities of raising additional revenue as outlined above. Unless there is extra effort and innovative action, it would indeed be very difficult to meet the immediate requirements the Railways need for maintenance, upkeep and modernisation in a phased manner in the coming few years.

Recall, that even though the Railway budget was merged with Union Budget, not much was expected. The creation of a Railway Safety Fund with a corpus of Rs 1 crore appears meagre more so due to the increase in accidents. An allocation of Rs 55,000 crores had been earmarked for the Railways out of its total capital expenditure of Rs 1.31 lakh crores. Construction of freight corridors, improving connectivity in Kashmir and in the North East, upgrading signalling, redeveloping stations were on the agenda. However, there was no mention of track renewal or upgradation in the Budget speech which was important.

Nevertheless, if there is a professional outlook from top to bottom and a strict enforcement of rules, there can be hope that the health of the Railways could improve. With its wide network across the country, the Railways need special care. Not by Government alone but the users too, i.e. we the citizens. — INFA

(Copyright, India News and Feature Alliance)