A prisoner of the past
Indian Railways’ marked by operational ineptitude and abuse
Being the world's largest rail network with 67,368 km of route length spread across the continental-sized country of ours, the Indian Railways (IRs) today is on the threshold of a challenging phase ahead, as it has taken multiple tasks on hand with no matching resources to execute them with the tenacity of purpose and result-orientation. With its more than 150 years history and heritage of pre-colonial past, the baggage it suffers, operating as it is as a departmental commercial undertaking of the Government of India under the overall control of the Railway Board, its image as a national common carrier moving passenger and goods over its vast network has suffered a serious dent due to operational ineptitude and the willful wrong use of the system by successive railway ministers for narrow political purposes down the decades.
As the NDA government under Prime Minister Narendra Modi made a tectonic shift in embracing a multi-modal transportation system by putting all modes of transport together, where railways, roadways, waterways, and airways contribute to the carriage in a holistic mode, the re-purposing of railways to play a crucial role in this gargantuan effort has altered the system's business-as-usual approach. With the return of the NDA in 2014, the investment plan for the railways for five years 2015-2020 was proposed at a whopping Rs 8.56 lakh crore, comprising Rs 5.57 lakh crore for infrastructure, Rs1.02 lakh crore for rolling stock and Rs1.96 lakh crore for others. Even as public annuity institutions like LIC is being roped in to take a major share of this investment burden, with the rest being borne by the state governments, private sector and internal generation of resources from the system, the way the railways manage the affairs with no core concern for improving existing facilities to passengers and user industries and taking on additional chimerical projects like the bullet trains meant that the whole arterial mode of transport is locked up in a debt trap for living beyond its ways and means, policy wonks wryly say.
It needs to be noted that way back in the early 1990s when the Narashima Rao government opened up the economy by deregulating and liberalising industrial and trade policies for the benefit of all so that a fresh air of competition would contribute to total productivity by enhancing efficiency in every segment of the real sectors, it was the then railway minister Jaffer Sharief who said that the railways would be part-privatised in non-core area, including sale of the surplus lands vested with the system. With the silver jubilee of the economic reforms behind, the performance on this score is pitiably pathetic. What else one could infer from the latest on this when minister of state of railways Rajen Gohain said in the Rajya Sabha in a written response to a query that "there is no proposal to privatise any operation of Railways". Lest this should be misread by the market and other private players looking for investment opportunities in the vast rail network, he hastened to add that "public-private partnerships (PPP) and outsourcing of certain facilities like cleaning, pay and use toilets, retiring rooms, parking is done on the need-based manner to improve efficiency".
Much has been written about the advantages of land use vested with the railways for commercial exploitation ever since the idea was mooted in the early 1990s, but the progress since then has been glacial. At a time when the railways' own internal resource mobilisation is meager and its borrowing requirements through its own wing of the Indian Railways Financial Corporation (IRFC), both internal and external, are mounting with monumental interest cost, the least the railways could do is to deftly make use of its surplus land for augmenting its investible kitty to finance ambitious development plans and programmes. As on end-March 2017, the total land available with the railways is roughly 4.76 lakh hectare, out which approximately 4.25 lakh hectares is under railway track and yard, structure and buildings, which include workshops and production units and under cognate usages, which include afforestation too. Approximately 0.51 lakh hectares land is vacant, which is mostly in the garb of narrow strips along the tracks that is required for servicing and maintenance of tracks, bridges, and other railway infrastructure. The vacant land which is not required for its operational needs, the railways utilize them in the interim span for commercial development through Rail Land Development Authority (RLDA). Currently, 54 sites measuring about 189 hectares have been entrusted to RLDA which are found feasible for commercial use.
What is the record so far of RLDA ever since it came into being in 2007 till date? The simple answer to this crucial poser is given by the latest report of the Comptroller & Auditor General of India (CAG), laid in Parliament a couple of days ago. Reviewing the progress in 17 such sites which were entrusted to RLDA in2007 when it was set up, the CAG report said that none of these sites has been developed so far! Audit detected that there were delays in engagement of consultants, delay in submission of reports by the consultants, delay in taking permission from state governments for change of land use, deficiencies in entrustment of land to RLDA by the concerned zonal railways by apportioning encumbered land, identifying wrong site or site with incomplete papers, which led to non-development of 17 sites of 167 acres.
What is shocking is that out of 17 cases reviewed by the audit, in only three cases developers were appointed but commercial development did not occur. In two cases, the development agreement could not be entered into and letter of intent had to be annulled as the first installment of premium was not deposited by the parties and in one instance the development agreement was terminated as the developer demurred to take the land offered by RLDA in exchange of land originally identified by the railways and the railways had to fork out the lease premium of Rs 43.12 crore along with interest!
Even as 13 of these 17 plots were planned for commercial exploitation with a lease potential of Rs 282.69 crore, RLDA has been able to earn Rs 67.97 crore from the development of multi-functional complexes (MFCs) at railway stations, which is other than earnings from commercial development! As against this, expenditure of Rs 102.29 crore has been incurred towards establishment, consultancy charges, advertisement during 2006-07 to 2016-17, the audit noted in an acerbic tone. If RLDA were autonomous and to function as a private entity and not part of the Ministry of Railways, it would have been referred to closure for its wobbly track record from inception to till date! Interestingly a couple of recommendations made to the Railways as to how to revamp the RLDA in February 2017 had not been responded till February 28, 2018, the CAG report bemoaned. It is easier to
envision a grand future for the system if the mandarins governing it do not have back-up ballast to execute them with precision and dexterity to bring about a salutary performance in the end.
(The views expressed are strictly personal)