It''s raining committees!

R.C. Acharya

One more committee — the fifth one in the last two years — this time a retired babu,  D.K.Mittal, who was  a former Secretary (financial services), being  asked to chair  a  committee on the Indian Railways with an objective to  chalk out a 'clear vision for Railways suggesting ways of improving  its finances' and the report is to be submitted by the end of December, 2014!

The world over railways is one of the most debated and restructured organisations. For instance, as early as 1965 British Railways had its Dr Beeching committee, which went around closing un-remunerative branch lines and outdated rolling stock repair and manufacturing facilities. 

Very soon Margaret Thatcher administered a big dose of privatisation, which saw the safety record plunging, resulting in re-nationalisation of the infrastructure business.  The government now continues to foot the bill, while the private sector makes all the profits, and passengers bear the brunt of massive tariff hikes.   

By the end of World War II most of the US railroads were driven out of business due to competition from monster trucks rolling across the new inter-state highway system built in the 1930s, while the Inter-state Commerce Commission  continued to regulate rail tariff with a complex system for setting shipping rates. 

Following an intense debate by US lawmakers, the Staggers Act of 1979 was passed allowing greater range for railroad pricing without close regulatory restraint, and established a separate  undertaking for passengers, which with the advent of  airlines was no longer a profitable business. 

Similarly, a decade ago Chinese Railways commissioned the World Bank  to advise  them  and ended up creating separate business entities and profit  centres for construction, maintenance,  operations, and manufacturing activities. The efficacy of this make-over  is yet to be fully documented.   

Back home  in the early 90s a committee to study 'Organisational structure & management ethos of Indian Railways' was headed by Prakash Tandon of  Hindustan Lever fame, while  A.V. Poulose, ex-Financial  Commissioner, Railways, chaired a  'Railway Capital Restructuring Committee' to  examine in considerable detail  various issues concerning the organisational and financial restructuring of the Railways. 

In 1998 the Rakesh Mohan Committee was set up to estimate the financing requirements of  the Railways to support a traffic growth rate commensurate with that of the economy and to suggest sources of funding for investments over a 15-year period, spelling out the fiscal and policy measures needed for the purpose. 

Just a couple of years  ago, Dinesh Trivedi  in quick succession appointed a committee headed by Anil Kakodkar for  suggesting measures to reduce 'rail accidents' and another one chaired by Sam Pitroda on 'Modernising  Railways'. While Kakodkar's proposals  had a price tag of Rs 50,000 crore, Sam Pitroda came up with a budget  of Rs 1 lakh core to put his schemes through.

Seeking a road map  for 'restructuring  and reforming Railways', Sadananda Gowda had a high-powered committee of economists and ex-public and private top guns set up under the chairmanship of  Bibek Debroy,  which has been busy over the last few months talking to various stake-holders.

Soon after assuming charge, keen to make his mark, Suresh Prabhu commissioned the services of  the 'Metro man',  Padma Shri  Shreedharan,  to suggest  a 'system and procedure ensuring proper accountability and transparency  at the level of General Manager of Zonal Railways, production units and other equivalent entities for taking all commercial decisions, including that of tendering', as he proposes to delegate such powers to these  operating levels. 

While a lot of intellectual churning may not be bad, it is ultimately the Railway Minister who has to take the call.  It may also be prudent for him to avoid treading  the populist path of  his worthy predecessors which has got this  1.4-million strong behemoth into a deep financial hole. 

With only one-third of  the total number of trains originating on the 64,000-kms network  earning  two-third  of  the revenue, it does not require an Einstein  to figure out that the freight business  needs to be  given the top priority in the Railways' scheme of things. The 14 Class 1 railroads of the US realised this decades ago and refuse to run passenger trains, allotting low priority to the federally operated 'Amtrak' trains which use its tracks.

Facing hundreds of demands and suggestions from the freshly minted  group of  MPs and MLAs,  Suresh Prabhu  will have to steel himself  to say 'No' to a long list of proposals, at the top being  new,  or extension of, or increasing the frequency of passenger trains, thereby allowing greater room for freight trains to run and earn money for the cash-strapped Railways.  

The same will hold good for any 'new projects', unless it is of  strategic importance to be funded by Central grants,  or   goes to increase the freight-earning capacity such as for evacuation of  coal, or providing ports connectivity etc.  With 406 projects  --  most of them un-remunerative -- costing a whopping Rs. 1.85 lakh crore  already stuck in the pipeline, there is hardly any room for any more of them.  

As happened with the mythical 'Samudra Manthan', when the 'Devas' ran away with 'Amrit' and 'Siva' was forced to drink the 'Vish' (poison)  turning his throat blue, Suresh Prabhu will have the unpleasant task of facing the flak when he presents his maiden 'un-populist' rail budget. It will be the 'Vish' which he has to gladly imbibe in order to save the nation's economic lifeline.

— The writer is a former Member of the Railway Board