Railways need to be corporatised

Union Railway Minister Suresh Prabhu and the railway board may disagree, the 65-year old Indian Railways — since the country’s regional rail systems starting in 1855 were nationalised and brought under a single network in 1951 — is not only one of the government’s most inefficient and corrupt bodies, but it is also the most insensitive department to its key customers, the Indian public. The decision by the railway authorities to print on rail tickets in capital letters that it “recovers only 57 percent of the cost of travel on an average” is unprecedented and probably the most arrogant and insulting way to communicate with a fare-paying passenger. 

Such a communication may also be meant to tell such a passenger that ‘be happy with what you get from the railways — poor condition of coaches, bad quality food and drinking water, stinking toilets, deteriorating travel safety and frequent long delays in travel time on long distant trains — because that is what you can get at best for what you pay for your rail travel.’  On paper, however, the annual earnings of Indian Railways, employing over 1.3 million people, is close to Rs. 1,75,000 crore ($25 billion) and profit is Rs.11,000 crore ($1.6 billion).

The Railways is a commercial organisation, and it is about time it operates as an efficient corporate entity, may be like Coal India Limited, the country’s largest corporate employer. Indian Railways can function as a holding company under which there can be five or six regional networks working as subsidiaries of the umbrella firm to ensure their smooth operations and trouble-free inter-connections or linkages. 

Under the Vajpayee government, the age-old ministry of post and telegraph (P&T), another colonial era government department, was thoroughly dissected and telecommunications part (earlier telegraph) was fully corporatised. Now, Prime Minister Narendra Modi is expected to convert post offices into deposit banks soon. There is no reason why the Railways should still operate as a government department. Currently, the rail ministry has some 16 departmental enterprises under its fold, including companies such as RITES, IRCON, CONCOR, IRCTC, DFCCIL, CRIS and RailTel, all rated to be among the best state-owned undertakings.

Indian Railways needs to be not only corporatised but also stock exchange-listed with the government gradually divesting its holding to the public by over 25 percent. The proposed abolition of the independent rail budget in 2017-18 should facilitate such a move. The operations of Indian Railways should be more transparent and competitive with other modern modes of public transportation. As a part of the government department, the Railways tended to be lethargic in administration and den of corruption and mafia operations — from wagon breakers, rogue contractor-suppliers and thieves of all kinds. 

Unfortunately, the passengers and freight dispatchers are made to bear the burnt. So powerful are the mafia and contractor-supplier networks — often under political patronage — that the former can even manipulate with the appointments at the highest level of the railway administration as the one was detected under a former railway minister in the previous government of the Sonia Gandhi-chaired United Progressive Alliance (UPA).

In fact, in more than many ways, Indian Railways has failed in its commercial function. Few passengers have seen the railway minister or board chairman travelling by trains to witness and experience what has gone wrong with the Railways and its services. Even if such officials decide to travel by a local or long distant train for a change, they may be doing so in designated special independent luxury coaches attached with such trains in keeping with the practice or legacy of the British Empire. 

Railway ministers are more comfortable travelling by air like most other ministers and MPs. After all, economy class air travel is often more than 20 percent cheaper than AC 1st Class train travel cost by trains like Rajdhani Express, connecting the national capital with major state capitals. One does not know if air travel by railway minister or board chairman is to save the railways’ ‘43 percent losses on fare paying travel’. Like most of the senior bureaucrats in the Rail Bhavan, the minister is happy and comfortable to deal more with files and projects than physically moving in rail compartments to have a first-hand knowledge of on-line railway operations.

Lately, the Railways is cutting cost on passenger amenities to improve recovery cost of their travel, though may be to an insignificant extent. It has abolished the decades-old pantry car facility for high-fare AC 1st class Rajdhani passengers. It has compressed the food menu in Rajdhani, Duronto and other premium trains, introduced half tickets for small children sharing berths with their parents or guardians.

Even almost two years after the announcement of wi-fi facilities in long distance trains such as Rajdhani and Duronto, travellers are still routinely informed the service is only “partly” operational “today,” meaning it is not operational. On the other hand, few in the Railways are concerned about wastage of thousands of tonnes of costly iron and steel by way of condemned coaches, wagons, rails and unused concrete sleepers, worth hundreds of crores of rupees, on or along the sidelines. 

Corporatisation of Indian Railways is likely to usher in a new management culture in the rail system. If the Indian Railways “recovers only 57 percent of the cost of travel” by passengers, it is more because of the management inefficiency, corruption and massive cost overrun in railway projects that are ultimately passed on to fare-paying passengers and freight dispatchers to bear. Under the present system, captive passengers and freight dispatchers are often at the mercy of the railway management. This must change soon.