Rlys — Panel signals reforms on fast track

Initially scheduled for December, it will now be most likely submitted early this month. Mohan, who heads the Infrastructure Development Finance Corporation, is tipped to be the Chief Economic Advisor in the Planning Commission. The committee was set up in 1998 to find ways of making private investment in the cash-strapped Railways more lucrative and profitable at a time when the government had set up similar committees to encourage private investment in roads, telecom and shipping and announced several benefits, including a tax holiday for investors.

Mohan has also suggested “immediate privatisation” of non-core railway activities including workshops and production units, and “spinning off” railway colonies to private builders. The instant outcome would be the “right-sizing” of the railways which employs a staff of more than 17,000 personnel.

A large number of maintenance staff will be free for Voluntary Retirement Scheme (VRS), he has said in the report, according to sources.

Handing over railway colonies to private builders would mean a huge amount of money for the Railways — an estimated Rs 20,000 crore. The report suggests that the Railway staff, staying there, should be paid House Rent Allowance so that they can stay in rented accommodation.

Sources said the report talks about introducing major changes in the functioning of the Railways and is likely to create controversy, once submitted and made public. The report does not find the present railway structure conducive to private investment and thus has suggested the division of the functioning of railways.

The committee is said to have suggested setting up of a policy-making board with half the members drawn from the Indian Administrative Services (IAS) and the remaining from the specialised Indian Railway Service (IRS). If this is accepted, it will be the first time that IAS officers would be inducted in the railway board.

Railway officials, however, are sceptical that anything will be implemented. “There have been reports on railway restructuring earlier too. In fact, one of the briefs of Rakesh Mohan was to study those reports including the Prakash Tandon report, submitted in 1991. Among his recommendations was doing away with the system of departments in railways as it led to inter-departmental rivalry which affected the functioning of railways,” said an official.

Tandon had also suggested that till the time restructuring was not completed, the railways should stop recruitment through the UPSC. However, none of the recommendations was implemented since the Gupta (former Chairman Railway Board) Committee — set up to study the Tandon committee report — did not think they were viable. “Now we hope, for the sake of railways, that at least some action is taken on the Rakesh Mohan committee report,” the official said.