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R.C. Acharya

UNDOUBTEDLY, Mr Rakesh Mohan had the best of intentions when he went about drafting the report on Policy Imperatives for Reinvention and Growth of Indian Railways. He has attributed the decade-long decline to "an unstable political system, increasingly driven by political compulsions, whereby prices could not be adjusted, costs could not be cut and investments decisions were increasingly distorted". Mr Rakesh Mohan has gone on to list the reasons why change is unavoidable as mainly due to the "new political reality that effectively tied the hands of the management."

Having said that, he has come up with a slew of proposals that, unfortunately, do not tackle head-on this basic problem. Among the numerous recommendations are: Corporatising the Indian Railways, with the Government (in other words, the political system) remaining firmly in charge of setting the policy direction. A new Indian Railways Executive Board (IREB), replacing the existing Railway Board, would be set up to govern the Indian Railway Corporation (IRC). More or less old wine in a new bottle. He has also proposed an Indian Railway Regulatory Authority (IRRA) that would regulate IRC activities as a monopoly supplier of rail services, particularly in relation to tariff-setting.

The Committee has gone on record that "there is no doubt that the compulsions (for restructuring) that drove developed countries do not apply to India, and that there is no doubt that the wholesale privatisation pursued in some countries is neither feasible nor advisable in India." Furthermore Mr Rakesh Mohan has been candid in stating that the UK experience reflects a hasty and ill-considered experiment, driven by political expediency, and is not a model to be followed."

Admittedly the most glaring example of how things have gone wrong with the craze for privatisation is the British Rail which, over the last decade or so, has steadily declined in efficiency and lost market share. While dismembering such a monolith into scores of private companies could have led to better financial controls through the creation of distinct cost centres, on the flip side it has created communication gaps and led to legal wrangling when things went wrong.

Railtrack, which inherited the infrastructure, has been under constant attack by the Toscos, the Train Operating Companies, for inadequate inputs to ensure safety standards. Reportedly, the people who scramble to reach an accident site first are neither the rescue workers nor the repair gangs but the lawyers, for whom establishing the liability with whatever evidence they are able to collect from the accident spot can make or break their clients case, whether they are the operators (Toscos), rolling stock owners (Roscos) or Railtrack itself! Disinvestment with no clear-cut objective is bound to prove a failure.

The open-sky policy, declared almost a decade ago, saw the induction of quite a few new airlines, resulting in better services; and now the cell war has seen telephony rates plummeting due to some intense competition. However, no such scenario can even remotely be predicted for the Railways. First, the Railways is a capital-intensive venture with long pay-back time-frames which few private parties would be willing to put their money in.

The route followed by British Rail — whereby such infrastructure as track, stations, signals, etc., remained with the Government as Railtrack, while operations, maintenance, etc., were sold off to the highest bidder in the private sector — unfortunately proved to be an unmitigated disaster. The problems of rail-wheel interaction is as old as the Railways, and the reported one-million-pound sterling grant to Birmingham University to understand the dynamics of this interaction, including design and maintenance factors, is an outcome of the recent spate of derailments on British Rail. In fact, soon after the train crash at Hatfield, a Wheel/Rail Interface System Authority was set up to give its inputs along with some of the major players — Manchester Metropolitan University, Alstom, Balfour Beatty and, of course, Railtrack. The last-named, which has to maintain the tracks to acceptable standards, would invariably like to pass the blame onto the Roscos!

The roadmap drawn up by Mr Rakesh Mohan in his 351-page report is, undoubtedly, impressive. However, the management leadership he has talked about, in the case of Railways, like any government organisation, starts at the very top. Madhavrao Scindia, whose tenure at the helm of this 1.6 million strong behemoth, saw it attain peak heights of efficiency, proved beyond doubt that even a politician who cannot evade the compulsions of a populist agenda, can still give a sense of direction and growth which are based on sound commercial principles.

Mr Nitish Kumar also proved himself an enlightened and pragmatic leader when he placed on floor of the Lok Sabha on May 27, 1998 a Status Paper on Indian Railways, wherein he boldly put forth some issues and options. This was followed within a couple of months by a White Paper on Railway Projects, detailing the massive financial burden that had been placed on the Railways over the last decade by his worthy predecessors.

Having placed his cards on the table, his colleagues could in no way accuse him of insensitivity to their demands for hand-outs, which often ranged from stoppage of a super-fast train at a small station falling in their constituency to a multi crore project benefiting their area of influence. The forthcoming Railway Budget will, undoubtedly, prove whether Mr Nitish Kumar is prepared to put his money where his mouth is.

Going by his record, one can expect a pragmatic and well-thought-out Rail Budget, not given to very many populist measures. However, how well he is able to keep fellow Parliamentarians at bay so that more unviable projects do not further inflate the Rs 36,000-crore burden on the Railways, will put his leadership qualities to a severe test. At the same time delaying the execution of such unviable projects already committed on the floor of the House by his worthy predecessors, by keeping them on the backburner, will undoubtedly call for his best political skills.

(The author is a former Member, mechanical, Railway Board.)

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