On the Wrong Track In­dia

In­dia is at the verge of be­com­ing a global eco­nomic power. Though al­ready an in­flu­en­tial South Asian coun­try, its rail­way sec­tor re­mains in dire straits.

Southasia - - CONTENTS - By Si­jal Fawad Si­jal Fawad is a stu­dent of eco­nomic and fi­nance at the School of Ori­en­tal and African Stud­ies (SOAS), Univer­sity of Lon­don.

The In­dian govern­ment needs to ur­gently re­struc­ture its rail­way sys­tem.

In­de­pen­dent re­search stud­ies show that the In­dian Rail­ways pro­vide em­ploy­ment to 1.54 mil­lion peo­ple and carry 30 mil­lion pas­sen­gers a day. It is also true that the rail­way sys­tem is one of the most danger­ous in the world – a sig­nif­i­cant num­ber of rail ac­ci­dents oc­cur ev­ery year and there are close to 15,000 deaths on rail­way tracks alone be­cause of the lack of pedes­trian cross­ings.

Loss of hu­man lives is just one as­pect of the dire straits that In­dia’s rail­way sys­tem is in; there’s also the loss of mil­lions of ru­pees that the state-run en­ter­prise in­curs in com­pen­sa­tions, re­pair work and hefty main­te­nance charges due to in­ef­fi­ciency. For a trans­port sys­tem serv­ing the sec­ond most pop­u­lous coun­try in the world, mis­man­age­ment and op­er­a­tional in­ef­fi­cien­cies are not just a men­ace but a re­al­ity that the cit­i­zens of the coun­try have to bear the brunt of.

The sys­tem des­per­ately needs some mod­ern­iza­tion. Lo­co­mo­tives run­ning on out-dated com­po­nents are fuel-in­ef­fi­cient, lead­ing to sig­nif­i­cant losses. About 15 per­cent of the rail­way sys­tem’s an­nual work­ing ex­pen­di­tures are spent on diesel, which is get­ting pricier by the day. Pay­ing so much on fuel ex­penses alone, the In­dian rail­ways could ben­e­fit from even a 10 per­cent re­duc­tion in diesel con­sump­tion which could save about Rs10 bil­lion (Rs1000 crores) ev­ery year.

But it is the sys­tem’s over­all safety that leaves a lot to be de­sired. From un­manned rail­way cross­ings to unan­tic­i­pated fire ac­ci­dents, there’s some­thing or the other lead­ing to count­less deaths that can be avoided by hav­ing a work­able safety mech­a­nism. In­flu­en­tial politi­cians fur­ther de­te­ri­o­rate the flail­ing sec­tor. Rail­ways min­is­ters have been ac­cused of cor­rupt prac­tices and mis­us­ing the al­lo­cated funds for the sec­tor. Only last month, In­dian Rail­ways Min­is­ter, Pawan Kumar Bansal re­signed from his po­si­tion for al­leg-

edly ac­cept­ing Rs90 lakhs in bribery from a se­nior rail­way of­fi­cer.

Pub­lic-Pri­vate-Part­ner­ships (PPP) had be­come the main­stay of the In­dian govern­ment for res­cu­ing one of the world’s largest rail­way sys­tems. How­ever the re­sponses from pri­vate play­ers have been rather luke­warm. The R3i (Rail­way In­fra­struc­ture In­vest­ment Ini­tia­tive) pol­icy had been ini­ti­ated a few years back, but bu­reau­cratic bot­tle­necks and com­plex le­gal pro­ce­dures acted as de­ter­rents for many pri­vate par­tic­i­pants. The Ded­i­cated Freight Cor­ri­dor ( DFC) pro­ject was also ini­ti­ated to en­able bet­ter man­age­ment of higher freight vol­umes, as well as to im­prove en­ergy ef­fi­ciency as far as trans­port of goods and trade goes. How­ever, the progress on this front has been tardy at best. This year’s bud­get also an­nounced the in­tro­duc­tion of the Train Pro­tec­tion Warn­ing Sys­tem (TPWS), which is more of a warn­ing sys­tem rather than a pro­tec­tion sys­tem. The TPWS is based on the Euro­pean Rail Traf­fic Man­age­ment Sys­tem (ERTMS), but that the TPWS has mal­func­tioned in the past says a lot about its ef­fi­cacy in In­dia. It’s also a rather ex­pen­sive op­tion at a cost of about Rs70 lakhs per km.

Last year in Septem­ber, a High Level Safety Re­view Com­mit­tee was set up to help re­duce the oc­cur­rence of train ac­ci­dents. A re­port by this com­mit­tee called for set­ting up pedes­trian bridges across rail­way lines to avoid deaths of peo­ple cross­ing rail­way lines. “No civ­i­lized so­ci­ety can ac­cept such a mas­sacre on their rail­way sys­tem,” quoted the Huff­in­g­ton Post, re­gard­ing the cross­ings deaths.

In the wake of grave con­cerns aris­ing about the dire straits that its rail­way sys­tem is in, In­dia turned to China, seek­ing some knowl­edge ex­change vis-à-vis the coun­try’s re­cently mod­ern­ized and ex­panded rail­way sys­tem. The se­lec­tion of China as a learn­ing part­ner be­comes even more in­ter­est­ing con­sid­er­ing that the coun­try re­cently dis­solved the Min­istry of Rail­ways (MOR). The MOR’s ad­min­is­tra­tive func­tions have been trans­ferred to the Min­istry of Trans­port, and the newly formed China Rail­way Cor­po­ra­tion (CRC) will be han­dling the com­mer­cial as­pects of run­ning the sys­tem.

Just as in the case of In­dia, China’s rail­way sys­tem had also fallen prey to cor­rupt prac­tices and in­dif­fer­ence of those in power. The sheer size of the two rail­ways meant that the or­ga­ni­za­tions wielded a lot of power and clout in the govern­ment ma­chin­ery, mak­ing them even more sus­cep­ti­ble to the non­cha­lance and self-in­ter­est of pol­i­cy­mak­ers. In fact, China’s rail­way sys­tem even had its own po­lice force and its own courts. Need­less to say, the pow­er­ful min­istries found a way around any needed govern­ment re­forms, with the com­mon man suf­fer­ing the most in the end.

When par­al­lels are be­ing drawn, it is in­evitable that the fate of the Min­istry of Rail­ways in In­dia will be ques­tioned. For a coun­try that had been en­joy­ing stu­pen­dous eco­nomic growth re­cently, the rail­way sys­tem ought to fa­cil­i­tate fur­ther progress rather than hin­der that growth. An­a­lysts are press­ing that it’s time for the In­dian Rail­ways (IR) to be freed from the govern­ment’s chains, as di­rect govern­ment con­trol is af­fect­ing both fi­nan­cial and op­er­a­tional ef­fi­ciency of the or­ga­ni­za­tion. Com­mer­cially, IR has found a non-con­ven­tional com­peti­tor in road trans­port, and to over­come this im­bal­ance, high-speed trains and re­vival of ig­nored projects such as the DFC is ur­gently re­quired. This can be fa­cil­i­tated only if some re­struc­tur­ing that passes on com­mer­cial ac­tiv­i­ties to an­other com­pany sees the light of the day.

The min­istry could be split such that plan­ning, pol­icy-mak­ing and reg­u­la­tion stay un­der its con­trol while the new com­pany man­ages com­mer­cial op­er­a­tions such as freight tar­iffs and pas­sen­ger fares. Pri­vate op­er­a­tors can bid for pas­sen­ger and freight mar­kets, help­ing bring com­pet­i­tive ef­fi­ciency to the sys­tem. Sim­i­larly, pri­vate in­vest­ment for projects such as high-speed trains should be en­cour­aged to en­able bet­ter op­er­a­tional ef­fi­ciency with­out fis­cal con­cerns for the govern­ment.

Over­all, any pro­posed re­struc­tur­ing should fol­low some ba­sic prin­ci­ples. Firstly, com­mer­cial and non­com­mer­cial op­er­a­tions should be sep­a­rated; se­condly, com­pet­i­tive bid­ding needs to be en­cour­aged as far as pas­sen­ger and freight op­er­a­tions are con­cerned; and fi­nally, some in­volve­ment of the pri­vate sec­tor for state-ofthe-art projects should see the light of the day.

Even if the min­istry fol­lows th­ese prin­ci­ples in some essence, an op­ti­mal bal­ance of ef­fi­cient com­mer­cial op­er­a­tions and strate­gic pol­i­cy­mak­ing could be achieved.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.