In­dian Rail­ways threat­ens to go the Air In­dia way with ris­ing es­tab­lish­ment costs, no new sou urces of rev­enue and lack of po­lit­i­cal will to hike pas­sen­ger fares

India Today - - THE BIG STORY - By Bhavna Vij-aurora

Seven months into fi­nan­cial year 2011-2012, In­dian Rail­ways threat­ens to go the Air In­dia way, star­ing at a deficit of over Rs 3,000 crore and los­ing Rs 18 crore a day. Its cash re­serves are down to a mea­gre Rs 75 lakh from Rs 13,431 crore in 2008 when Lalu Ya­dav ex­ited as min­is­ter. Ris­ing es­tab­lish­ment costs and salary bill, pop­ulist mea­sures, a stub­born re­fusal to hike pas­sen­ger fares and no new sources of rev­enue have brought Rail­ways to this pass. It spent nearly Rs 96 for ev­ery Rs 100 it earned last year, what is known as the Op­er­at­ing Ra­tio. It is now ex­pected to cross 100 per cent, un­prece­dented in the past two decades.

Ma­jor works and projects are suf- fer­ing as con­trac­tors and sup­pli­ers haven’t been paid their ar­rears. Ba­sics like fish­plates that con­nect the tracks, cou­plers to join the wag­ons and skids that stop the train from rolling down the track are not be­ing supplied since mid-2010. Hy­giene at train sta­tions has de­clined, with brooms in short sup­ply at rail­way stores. There is lit­tle money to is­sue con­tracts for clean­ing of tracks in the sta­tion area, re­sult­ing in exc­reta ac­cu­mu­lat­ing in sta­tions with heavy foot­falls such as New Delhi.

Rail­way Min­is­ter Di­nesh Trivedi has sought a loan of Rs 2,000 crore from the Cen­tre. Sources in the min­istry laughed at talk of the money be­ing re­turned. They say the money is ac­tu­ally to pay the salary bill, which amounts to over Rs 4,500 crore ev­ery month. The Sixth Pay Com­mis­sion has taken the an­nual salary bill of Rail­ways to a hefty Rs 55,000 crore.

Rail­ways had an­nounced a 78-day pro­duc­tiv­ity bonus to its 13.75 lakh em­ploy­ees for the fes­ti­val sea­son amount­ing to Rs 1,100 crore. Sources now say 30 per cent of the amount might be paid to the em­ploy­ees in cash and the re­main­der put into their Prov­i­dent Fund. “Rail­ways spends 68 per cent of its funds on es­tab­lish­ment costs, in­clud­ing salaries for the 13.75 lakh em­ploy­ees and 12 lakh pen­sion­ers, and 20 per cent on the elec­tric­ity and diesel bill. It has just around 12 per cent of the to­tal out­lay avail­able for run­ning and en­hanc­ing ser­vices, im­prov­ing safety, re­plac­ing old worn-out as­sets and pro­vid­ing for pas­sen­ger ameni­ties,” says an of­fi­cial in the Rail­ways’ fi­nance depart­ment.

The crux of the prob­lem, say rail-

way of­fi­cers, is the pop­ulism over sev­eral years. While there are no new sources of in­come, sops like iz­zat passes, loss-mak­ing Yuva trains and con­ces­sions for var­i­ous cat­e­gories have made things worse. Pas­sen­ger fares have not gone up in nine years with freight charges be­ing ir­ra­tionally high, caus­ing Rail­ways to lose out even on freight traf­fic to the road sec­tor. Pas­sen­ger fares are be­ing sub­sidised to the tune of Rs 20,000 crore ev­ery year.

There is no al­ter­na­tive to en­hanc­ing fares. Even the rail­way em­ploy­ees’ unions, hith­erto op­posed to any kind of ra­tio­nal­i­sa­tion of pas­sen­ger fares, have changed tack. Fear­ing fi­nances go­ing awry, two ma­jor unions, the All In­dia Rail­way­men’s Fed­er­a­tion and the National Fed­er­a­tion of In­dian Rail­way­men, have made a case for rais­ing fares by 20-40 per cent.

The Prime Min­is­ter’s Of­fice ( PMO) and Plan­ning Com­mis­sion have been push­ing for a hike in pas­sen­ger fares. The Con­sul­ta­tive Com­mit­tee on Rail­ways, in its re­port re­leased in Au­gust, ad­vo­cated rais­ing fares “within rea­son­able lim­its to off­set the in­fla­tion­ary trend and diesel price in­crease”.

Rail­way Min­is­ter Trivedi ad­mits that there is a press­ing need and an in­creas­ing de­mand to hike pas­sen­ger fares. “We don’t want to go the Air In­dia way,’’ he stresses. He talks of a dy­namic pas­sen­ger fare pol­icy

but is not clear yet about what the pol­icy will en­tail, whether it will be based on de­mand and sup­ply—the cri­te­rion used to in­crease freight charges by 6 per cent on Oc­to­ber 15—or be linked to in­crease in diesel cost. “There is no con­crete plan yet but it has to be done in­tel­li­gently,’’ Trivedi says. One view is to in­crease only up­per class fares and an­other to hike them across the board.

Dy­namic pric­ing pol­icy, if im­ple­mented across the board, will be a dis­as­ter. It can be done only in AC coaches and that too dur­ing peak sea­son. It won’t earn much rev­enue since over 90 per cent pas­sen­gers travel in non

AC un­re­served and sleeper coaches. Lalu had suc­cess­fully in­tro­duced dy­namic pric­ing in Tatkal tick­ets but the mea­sure at­tracted a lot of crit­i­cism. His suc­ces­sor, Ma­mata Ban­er­jee, sub­se­quently did away with it.

Rail­ways also faces a back­log of va­can­cies: 1,26,044 posts in the safety cat­e­gory and 14,896 for un­manned level cross­ings across the coun­try. These in­clude va­can­cies for top posts such as mem­ber (traf­fic) and a dozen gen­eral man­agers. There aren’t even enough peo­ple to man ticket coun­ters at a premier sta­tion like New Delhi. Rail­way­men are in­creas­ingly look­ing at greener pas­tures. More than 50 of­fi­cers have quit in the past two years. Com­pa­nies like Larsen & Toubro, Adani Group and Re­liance are the favoured des­ti­na­tions.

Rail Bha­van of­fi­cials say there is sim­ply no ques­tion of ex­pand­ing ser­vices and im­prov­ing pas­sen­ger ameni­ties. Rail­ways has failed to put in any money into the De­vel­op­ment Fund, which is meant to­wards bet­ter ser­vices and ameni­ties. No money has gone into the De­pre­ci­a­tion Re­serve Fund, meant for track re­newal, gauge con­ver­sion and sig­nal mod­erni­sa­tion, ei­ther. The Rail­way Safety Fund and the Cap­i­tal Fund are both empty. Trivedi’s pre­de­ces­sor, Ma­mata, failed to ful­fil her 2010-2011 Bud­get prom­ise of float­ing cap­i­tal bonds to gen­er­ate rev­enue for the Cap­i­tal Fund.

“With con­trac­tors not get­ting their pay­ments, all work is pil­ing up,” said a rail­way of­fi­cial. Ma­mata’s Bud­get an­nounce­ment of con­struct­ing 1,000 km of new line ev­ery year has also not ma­te­ri­alised. Even the 500 km con­structed over the last two years is not oper­a­tional. Work on en­hanc­ing ca­pac­ity of the three plat­forms han­dling sub­ur­ban train traf­fic at Chen­nai sta­tion has been sus­pended. Lifts at Ahmed­abad sta­tion couldn’t be in­stalled as the divi­sion ran out of money. Trivedi wanted the rail­way hos­pi­tal near New Delhi Rail­way Sta­tion to be up­graded but hasn’t been able to spare Rs 5 crore needed for it.

Safety is a big ca­su­alty as cor­ners are cut. Even rou­tine track pa­trolling is suf­fer­ing. Track main­te­nance, re­place­ment of over-aged as­sets and sig­nalling sys­tem is be­ing ne­glected. Safety projects like anti-col­li­sion de­vices ( ACDS), en­vis­aged in 2001, have been put on the back burner even though over 300 peo­ple have lost their lives in train ac­ci­dents since May 2009.

A con­cerned PMO has sought a de­tailed safety plan from Rail­ways. Rail Bha­van sources say the re­quire­ment is to the tune of Rs 70,000 crore. Rail Bha­van sources say they will now seek a gen­er­ous grant from the ex­che­quer out­side the Rail Bud­get.

The list of re­neged prom­ises, first un­der Ma­mata Ban­er­jee and now her suc­ces­sor and close aide Trivedi, is be­com­ing longer by the day.





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