Point of departure
Indian Railways must be rid of the railway ministry....
More than 60 people lost their lives on Monday when the Uttarbanga Express rammed into the Vananchal Express at a station in West Bengal. Since Mamata Banerjee took over as railway minister a little over a year ago 428 people have lost their lives (and over 600 injured) in nearly 200 railway accidents (including nine collisions). That is a shocking safety record. There is plenty wrong with Indian Railways,from the state of its balance sheet to the quality of the services it offers,but none is perhaps a matter of life and death like safety is. And Banerjee has presided over a Railways machinery seemingly unable to even guarantee this most basic need — safety of travellers. In another era,or in another country,even one fatal collision would have been enough to claim a ministerial resignation. But Banerjee isn’t the kind to leave of her own volition and the UPA,dependent on her 19 Lok Sabha seats for survival,is unlikely to give her marching orders.
However,it’s time somebody read Banerjee the riot act. She cannot continue to treat the ministry of railways as an extra-curricular activity while she goes about the task of preparing for the West Bengal elections next year. Her absenteeism isn’t simply taking a toll on the Railways’ profit and loss account,it is costing people their lives. This newspaper reported on Tuesday that 90,000 appointments related to railway safety are pending because the minister has been mostly absent from Delhi. And the installation of more anti-collision devices,that could prevent accidents like the most recent one,remains mired in red tape. There is a thin line in a minister taking a hands off approach to management and abdicating responsibility and leadership altogether. Banerjee is clearly on the wrong side of that line.
Her predecessor,Lalu Prasad,on the other hand found himself on the right side of that same dividing line. The Railways,written off at the start of the decade,turned into a massive profit generating entity in Lalu’s time mostly because of two very simple but very effective managerial decisions,both relating to freight. The ministry in Lalu’s time speeded up the turnaround time of freight trains and allowed them to carry extra load. With a little help from the general boom in the economy,these two measures helped the Railways mop up a lot of money.
Yet,with hindsight,one can safely say that the temporary boom in fortunes was a setback for the longer term future of the Railways. The euphoria over profits allowed the Railways to gloss over the pathetic state of their outdated technology (particularly in rolling stock),the substandard quality of train and station services (even on premier trains and premier classes) offered to passengers,and continued question marks over requisite safety standards. The profits eventually disappeared when the slowdown began without being sufficiently invested in addressing these long-term problems of the Railways.
The fact is that few of the ministers who have presided over the Indian Railways these last two decades have had any transformative vision for the behemoth. Railways has been a prized portfolio because of the patronage (jobs,coach factories,special trains,etc) that can be doled out to favoured constituents and constituencies. And populism has completely clouded decision making in Railways,even as the rest of the economy has managed to squeeze its way out of the clutches of mindless populism.
So while Mamata Banerjee has been a particularly incompetent railway minister,the problems may not disappear with her mere departure. Railways needs radical institutional reform.
The obvious solution for entities that are run aground by political interference and government mismanagement is privatisation. However,because the Railways is a natural monopoly (tracks and stations can’t be duplicated easily for example),privatisation can be a complex exercise. It can even lead to a worsening of the scenario as it did in the UK after the haphazard privatisation of British Rail in the 1980s. In any case,given how lukewarm governments have been to privatisation in India,expecting privatisation of the Railways anytime soon is wishful thinking. Still,there are a number of steps that can be taken to radically reform the Railways that stop short of privatisation.
As a start,it would be useful to abolish the ministry of railways. Its functions then need be hived off into three separate entities. The policy aspects of the Railways can be diverted to a unified ministry of transport. Ideally,civil aviation should also be a part of a single ministry of transport,much like it is elsewhere in the world. This unification would help create a more broad based and rational vision and policy for the country’s transportation infrastructure as a whole.
The operational management of the Railways should be the domain of a newly created PSU,say Indian Rail,with its own board of directors,CEO and chairman. For all practical purposes,the new PSU should be granted full operational and managerial autonomy,but it can be accountable to the ministry of transport. Of course,the new PSU will still be a monopoly. There is a need therefore to set up an independent regulatory authority which can enforce safety standards and safeguard consumer interests. Again,this is standard practice now in other sectors of the economy.
In this way the three key functions of policy,management and regulation will be carried out by separate entities,something that will ensure necessary checks and balances that are completely absent as long as all the functions are carried out by the same ministry.
What will,however,still be missing from this overhaul is an element of competition for the services offered by the Railways. An independent regulator,while useful,isn’t a like replacement for competition from another corporate entity. But how can competition be introduced without privatisation? Instead of hiving off operations to one single PSU entity,the government could divide the Railways into six or seven different PSUs,perhaps by region. Each of these can then be allowed to offer competing inter-zonal services,while having the responsibility to maintain tracks and stations within their regional domain.
These are just some of the available options to reform the railways. What is needed is political will. And an early departure for Mamata Banerjee,duronto.
The writer is a senior editor with ‘The Financial Express’
dhiraj.nayyar@expressindia.com
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