Railways Need a Lot More Than Just 'Continuity with Change'

New Delhi: The dire need for improvement in punctuality and safety in train operations besides the wide imbalance between expenditure and earnings along with upgradation in basic passenger amenities are the hard realities that stare at the second innings of Railway Minister Piyush Goyal.

With such a massive mandate, this is time to push major reforms like setting up of a Rail Development Authority (RDA), which has been put in cold storage, as well as changing the criteria for top-level appointments to place deserving officers at the right place.

Though Goyal’s thrust has been on track renewal and the Indian Railways has managed to eliminate unmanned level crossings at major broad gauge routes -- the main cause of train accidents – incidents of equipment failures and cattle run over on tracks are showing no sign of decrease. Since Goyal had repeatedly said his goal was to reach the ‘zero accident’ level, a concerted effort is required to achieve the aim.

Though the Cabinet approved the proposal for the Railways to divest from regulatory functioning in April 2017 and set up RDA to help the public transporter take decisions on pricing of services, consumer interests, generating revenue and competition, among others, this is yet to happen.

 Why RDA?

 The long-awaited regulator is expected to perform four primary functions — tariff determination; ensuring fair play and level-playing field for stakeholder investment; setting efficiency and performance standards; and dissemination of information.

Though the Railways is trying its best attract private investment in several areas such as station redevelopment, next generation coaches, particularly trainset, rail manufacturing, augmentation of solar and wind energy, waste to energy plants, bio-vacuum toilets and also the plan to introduce passenger train operation in some selected routes to private players, it has not met with great success. RDA is expected to enable a level-playing field for private players in these areas
 

(Most importantly, no Minister would want to cede the power to decide on freight rates and passenger fares to an outside regulatory body.)  

Dismal Financial Scenario

Facing a dismal scenario on the financial front, Indian Railways came out with the Freight Advance Scheme, a new policy notified on March 9 this year, asking major customers to avail tariff freeze for a year against payment of advance freight. Through this, it just about managed to keep its head above water in 2018-19 with an operating ratio (OR) of 97.3%.

But this happened only after getting the state-run NTPC and Container Corporation of India (Concor) to pay Rs 10,000 crore and Rs 3,000 crore, respectively, in advance as freight charges for 2018-19. The national transporter’s OR had crossed 100% in November 2019, indicating an operational deficit.

So, the Railways had to undertake financial engineering by showing the next year’s income as revenue for the current fiscal in a bid to show that its financial performance was aligned with the interim budget numbers.

Since earnings have not increased though expenditures have gone up, while the Railways struggled with burgeoning staff and pension costs after implementation of the Seventh Pay Commission, there is a urgent need for drawing a plan to increase revenue through various measures in the passenger and goods segments to check the operating ratio. This would require innovative measures to attract passengers from road and air services.

Goyal also needs to focus with right earnest on non-fare revenue which witnessed a slowdown during his earlier regime. For FY19, the transporter was able to contain its expenditure a tad below the revised estimate (RE) of Rs 1.43 lakh crore.

Railways’ capital expenditure, which it manages with assorted borrowings, apart from a tiny operational surplus and support from the Budget, stood at Rs 1,33,396 crore for FY19 — an all-time high -- and was up Rs 30,000 crore from the capex achieved a year ago.

The actual capex, however, turned out to be less than the RE of Rs 1,38,000 crore and the budget estimate (BE) of Rs 1,46,500 crore.

 Dwindling Freight Share

 
Indian Railways is facing a loss of around Rs 30,000 crore in the passenger segment and is heavily cross-subsidised from freight profit.

The national transporter has to come out with policies to hold on to its dwindling share in freight movement while coal, steel, cement and petroleum products continue to provide Railways with two-third of earnings.  

Merit Alone Should be Criteria

As recommended by the Sridharan Committee, the time has come to fill up top-level vacancies in the Railways through the right act of selection where merit should be criteria and not seniority alone.  (Currently the practice is to appoint on seniority basis. As a result, many key departments have suffered with several projects languishing. In fact, most of the projects in the country that are lagging belong to the Railways. The DRM, GM and Members are key posts and a high performer on these posts can do wonders, which is not the case at present due to seniority and age being the criteria.

 Dedicated Freight Corridor

The much-awaited Dedicated Freight Corridor (DFC) is yet to be operational with the project missing several deadlines. There is an urgent need to expedite the project as it aims to decongest the existing track by shifting freight operation to the dedicated route. This will not only speed up goods movement but also free-up the path for passenger trains. 
 

The reduction of travel time through introduction of semi-high speed trains on upgraded dedicated track also remains a promise. There are many routes such as Delhi-Chandigarh and Delhi-Bhopal which can have semi-train operation. There are also plans to fence off Delhi-Mumbai and Delhi-Kolkata routes for running trains at 160 kmph.   
 

Goyal is expected to introduce 'speed is the new mantra' for Railways by taking up semi-high-speed projects.

 Rail Electrification

Goyal needs to do a reality check on the actual works done to electrify routes. Because there are many segments where work is half-done though its shows as ‘fully commissioned’ on record.

After taking over charge for the second time, Goyal said there was “continuity with change” as he welcomed his new colleague Angadi Suresh Channabasappa, an MP from Karnataka, who has been appointed as Minister of State for Railways. While Manoj Sinha, MoS for Railways in the last regime, lost the elections, Rajen Gohain, the other MoS, did not contest the elections this year.

Over the next five years, the government will try to improve the experience of Indian Railways as a service while also looking to increase the national transporter's passenger and freight traffic, Goyal said.

Indian Railways, often called the lifeline of the country, plays a crucial role in not just passenger and goods movement, but also in the economic growth. So there should be focus on safety, running trains on time, infrastructure upgradation, increasing speed of trains and enhancing passenger amenities.
 

However, while the punctuality rate is hovering around at 69%, cleanliness and passenger amenities, barring on premium trains, are still wanting.

The station development project also needs to be expedited. So, it is high time Indian Railways went for reforms which have been shunted to the slow track, if it is serious about transforming the public transporter as the best service provider in the world.

The writer is a senior Delhi-based journalist. He can be contacted at [email protected]). The views are personal.