Stage set for pvt player’s role in rail revamp
Indian Railways has joined hands with the Institute of Cost Accountants of India (ICAI) to study cost-drivers of the world’s eighth largest employer.
The statutory body of accountants, formed under an Act of Parliament, will study the railways for over 20 months and framed a cost-effective manual to fix ticket prices both for passengers and cargo among others. The study will then make a comprehensive report to the rail ministry.
“Work on the project has already commenced. We have started with north India and will soon move to other parts of the country,” Sanjay Gupta, vice-president at ICAI, confirming the development, said.
“The whole idea is to move Indian Railways from the old, conservative approach to more systematic ways of working,” Gupta said, talking to The Free Press Journal about this pan India project for railways without disclosing inside details of the study.
Gupta, who is ICAI’s past president and central council member, believes that the study would also help in the formative days of the proposed Rail Development Authority (RDA), an independent rail regulatory authority. Recently, Union Cabinet had given its nod to the setting up of RDA with an initial corpus fund of Rs 50 crore.
“This study would also help railways to invite participation of private players in future. Setting up of a regulatory body is the start of allowing private players in the space,” an official said.
Stating that new body is on the lines of the Telecom Regulatory Authority of India, the official said, “Once a regulatory body comes into the picture, one can expect the sector to open up as in the case of telecom sector.”
As of now, ICAI is studying the warehouse businesses of railways, which will be followed by a study on freight, passengers and catering.
An official said the government is of the view that railways should outsource its non-core business units like catering, even if they are profit-making units. It would allow the railways to concentrate on its core model, the official added.
Meanwhile, cargo is one space that the railways need to bring flexibility as it has not able to make the sector attractive to traders and other businesses. Adding to ICAI, railways want to understand how to manage cargo in peak and non-peak hours to achieve its cargo goals.