Chugging reforms

The Bibek Debroy Committee, seventh in a series of committees spanning over last two years, and set up to suggest reform and restructuring of Indian Railways, has come up with a long list of recommendations to make Bharatiya Rail more result-oriented and profitable. Among its scores of recommendations is allowing private entry in both passenger and freight operations, setting up an independent regulator, separate policymaking by the board from implementation and rationalise railway zones.

It is a mammoth task by any standards. The Indian Railways have two very powerful unions that have a long tradition of taking up staff grievances to the highest level. Drafting the report was the easy part, but its implementation will undoubtedly face a series of roadblocks from vested interests, both inside and outside the organisation. Focusing on how the railways should adjust, the committee suggests restructuring of the railway board, which, it suggests, should function like a corporate board for railways. It does admit that the entire restructuring exercise would be a long-drawn-out process, spanning at least 10 years, essentially because of the important niche that the railways occupies in the Indian economy.

The committee is of the opinion that “overnight experiments are doomed to fail and should not be attempted, as the costs of failure will be disastrous”. The “10-year roadmap” should be worked upon “incrementally”. The eight-member committee found that railway men are involved in a number of non-core activities, such as medical, education, ensuring security of its property and of passengers. A large number of staff is employed in unskilled work while there is shortage of manpower for skilled operations such as running trains.

In its considered opinion, the railways should exit such non-core activities, which could be privatised or outsourced, These include an infrastructure of 125 hospitals, 586 health units and 14,000 beds, served by 2,597 medical officers and 54,000 paramedical staff. It would like the Railway Police Force to be placed under the administrative control of the home ministry, a move that could prove to be disastrous, with responsibilities being divided.

The railways were the first ever large-scale industrial enterprise to be created by the British on the Indian subcontinent, for which a number of railway companies incorporated in the UK were invited. Thousands of stations, hundreds of marshalling yards, goods sheds, locomotive and rolling stock maintenance depots, workshops and other facilities were created in total wilderness, with minimal facilities available for the workers and their families.

Thus, the creation of a number of housing colonies with its support system, and a security force dedicated to its needs — which the committee now considers a non-core activity — was at that time very much a basic necessity and continues to be so even now. Even after Independence, some of the major manufacturing units such as Chittaranjan Locomotive Works near Asansol, Diesel Locomotive Works at Varanasi, Integral Coach Factory, Chennai, Rail Coach Factory, Kapurthala, and Rail Wheel Factory in Bengaluru amongst others have such basic amenities, in the process earning considerable worker loyalty to the organisation.

Presently, the railways runs a degree college and 168 schools that are a part of its townships mostly located in small towns of Bhusawal, Patratu, Gooty, Katni, etc. where the railways decided to set up shop more than 150 years ago. Following the example set by the railways, most of the major public sector undertakings such as Steel Authority of India Ltd, Bharat Heavy Electricals Ltd, Coal India Ltd, and private sector entities such as Larsen & Toubro Ltd, Tata Steel Ltd have also opted to provide such welfare measures as part of their business plan in order to gain staff commitment and unstinted loyalty.

These hospitals and health units being run by the private sector would affect millions of employees who have limited financial resources, since they would like to turn them into profitable ventures. Assuring free treatment for the railway staff would inevitably degenerate into unacceptable levels of service. A strike-free record of over 40 years for the 1.4 million railway staff has not been a mean achievement in the field of industrial relations in India. The Bibek Debroy Committee has suggested adopting the restructuring model of the railways of the UK, Germany, Sweden, Australia — rail networks which are nowhere in the same league as Indian Railways’ levels of passengers or freight.

Carrying a substantially higher level of freight, US railroads do have management and business practices worth emulating, but only in freight business. America’s Amtrak, a government-owned entity, carries passengers with annual ticket sales that match Indian Railway’s daily passenger volumes. Surprisingly, China’s rail network, which is perhaps closest to the Indian scenario, does not find any significant mention in the report. Nor has the committee bothered to uncover the true story of European railways where the tariff has soared and most of the railways, such as the one in the UK, still provide huge subsidies to the infrastructure companies, which remain state owned. In short, the privately owned railway operating companies make all the profit, while the taxpayer ends up paying for the losses.

However, the committee has admirably tackled the most crucial problem that railways faces — departmentalism. It has seriously eroded its capability to function as a cohesive team of nearly 10,000 managers and engineers, who work towards a common goal. Its well-thought-out roadmap requires revamping the way managers are inducted into various services/departments, their progression in their respective careers, and the urgent need to create a Indian Railway General Management Service, a pool of managers drawn from all services who would then man the crucial posts of additional divisional railway managers, divisional railway managers, and the all powerful general managers of zonal railways. This is the most vital recommendation, which deserves to be adopted right away, to enable the railways to unleash its full potential as the nation’s engine of economic growth.

The writer is former member of the Railway Board