Do Indian Railways lack vision?
Raghu writes extremely well as normal to him and one cannot fault him.
How ever I have one point to make which some how he missed.
India has to decide whether Railway is a pure commercial organisation with profit as the motive or a government department responsible for social justice.
If we are commercial, then the approach will be to improve profits, introduce more cost effective technologies, remove cross subsidies, and be customer friendly.Even in recruitment and training the work force will be lean and mean and will enjoy the same level of freedom as available for any private company abroad. Like US companies running railways we can concentrate on profit making sectors and create a few AMTRAKS for government subsidies and support. That is the sure way to permanently kill railways and technology, as US has done. It will just carry freight and freight and freight.
But of late US President is trying to change all that with heavy Government investment and stimulus focusing on railways.
Ok let us take European way- which is appearing better because they seem to have balanced the conflicting requirements of commercial and social responsibilities.
The cost of travel for a passenger is quite high. High speed travel is made possible entirely because of the Government footing the entire capital cost. How many of us are aware the the French private railway manufacturing companies are given support by Euro One billion not to sink. Our government is not capable of giving such support to private companies! European government like Germany funded all the cost of development of high speed technology by Siemens. Same with France. The rights to technology remained with the private companies only. We cannot hope to do some thing like that in our country. So what you see is not a simple commercial organisation in Europe but a mature government policy of identifying where support is needed and fully fund the same. The railway is not a soap manufacturing industry. So standards IBM grads cannot analyse applying their rules taught in class. I had to tell Rakesh Mohan the same in the presence of our Minister, long time back.
The central government routinely floats up oil companies with Rs 50,000 cr bonds to cover losses. Then Banking Industry is routinely propped by the famous infusion of capital word used by Finance Ministry to cover their non-performing assets, an euphemism, actually for very poor management or wanton profligacy on the part of the banking industry. Of course this applies to nationalised banks, not to private banks, which will be first taken over to give the same support in many a case.
But our central government is not willing to extend the same support by policy to railways.
The mandarins in non-railway departments want railway to be profitable and be responsible to deliver social justice, keep fares low for essential commodities, low fares for passengers, and of course maintain the high employment potential as well follow all the government policies to cause social upliftment too. And then they want us to build world class railway stations, my foot. It is adding insult to injury.
It is a wonder we are surviving and doing all these things, carry almost double the staff strength and with hardly 30% really working, and still keep costs so low as to even end up paying dividend on the great help said to have been received from the central government.
The government does not have to courage to make the capital values as zero value, like Singapore did for railway. Nor do they cover the costs of social burdens carried by railways.
We lack maturity on the part of the government like China has.
Now look at China. Who is funding the entire High speed technology or the expansion of railway network?
Can Government of India today take a decision, that we release Rs 1000b annually for network expansion and modernisation with full freedom to function for the railways?
And this capital infusion will be with zero capital cost to railways, that means railways should generate enough operating surplus, with no dividend liability.
Are you all aware the Konkan Railway carries almost Rs 1000 cr as capitalised interest for the actual project cost of Rs 2500 cr and then over Rs 3000 cr, annual interest burden at 10% is loaded on the small corporation! It is actually a killing proposition. We have no courage to change some archaic British rules and with glee other mandarins play with railway guys. It took more than 7 years to fight for converting the loan assistance being given for servicing loan, in to preferential capital shares, with the result, the company was paying interest on interest and it was a nightmarish book-keeping, reflecting a sadistic administration. Then Mr NP Singh of Planning Commission tells me that the corporation is a huge loss making company, and with negative net worth cannot be allowed to execute projects for others to earn some money!!!
I cite this as only an example of our attitude.
There is no dearth of vision amongst railway mandarins. But they have a restriction and constrained by the vision of India. Does India have a vision statement? Railway is a mere cog in the wheel which has to tailor their vision to the same. if India has myopic vision, since Railway has to see through the same eye, will also be having myopic vision.
Actually many smart mandarins of Railways have to accept the limitation and function within the constraints of total distrust, abuse of vigilance, outmoded stores procurements codes, disciplinary rules, frowned upon innovation as it does not have rules for managing, making service a game of surviving snakes and ladder game. The vision of every officer is to seek the narrow path of not getting embroiled in some unwanted controversy and remain as anonymous as possible, to peacefully retire at the highest possible level as luck would permit, and settle down for a drawing monthly pension.
If we expect railway to have vision, first the Planning Commission must have a vision for India and what kind of railway they want.
All infrastructure modernisation and expansion, high speeds technology, policy make over from British manuals to become liberated to treat Indian company as Indian, for the purpose of open funding and development with public money without throwing in the gamut of CBI and Vigilance. Do we have self-confidence to trust each other, Indians among themselves.
Corruption and self deceit with hypocrisy cannot have vision worth a toilet paper.
Printed from ECONOMIC TIMES, 23 Feb 2010
Railways should transform its structure and culture
23 Feb 2010, 0713 hrs IST, Raghu Dayal,
http://economictimes.indiatimes.com/articleshow/5605614.cms
How ever I have one point to make which some how he missed.
India has to decide whether Railway is a pure commercial organisation with profit as the motive or a government department responsible for social justice.
If we are commercial, then the approach will be to improve profits, introduce more cost effective technologies, remove cross subsidies, and be customer friendly.Even in recruitment and training the work force will be lean and mean and will enjoy the same level of freedom as available for any private company abroad. Like US companies running railways we can concentrate on profit making sectors and create a few AMTRAKS for government subsidies and support. That is the sure way to permanently kill railways and technology, as US has done. It will just carry freight and freight and freight.
But of late US President is trying to change all that with heavy Government investment and stimulus focusing on railways.
Ok let us take European way- which is appearing better because they seem to have balanced the conflicting requirements of commercial and social responsibilities.
The cost of travel for a passenger is quite high. High speed travel is made possible entirely because of the Government footing the entire capital cost. How many of us are aware the the French private railway manufacturing companies are given support by Euro One billion not to sink. Our government is not capable of giving such support to private companies! European government like Germany funded all the cost of development of high speed technology by Siemens. Same with France. The rights to technology remained with the private companies only. We cannot hope to do some thing like that in our country. So what you see is not a simple commercial organisation in Europe but a mature government policy of identifying where support is needed and fully fund the same. The railway is not a soap manufacturing industry. So standards IBM grads cannot analyse applying their rules taught in class. I had to tell Rakesh Mohan the same in the presence of our Minister, long time back.
The central government routinely floats up oil companies with Rs 50,000 cr bonds to cover losses. Then Banking Industry is routinely propped by the famous infusion of capital word used by Finance Ministry to cover their non-performing assets, an euphemism, actually for very poor management or wanton profligacy on the part of the banking industry. Of course this applies to nationalised banks, not to private banks, which will be first taken over to give the same support in many a case.
But our central government is not willing to extend the same support by policy to railways.
The mandarins in non-railway departments want railway to be profitable and be responsible to deliver social justice, keep fares low for essential commodities, low fares for passengers, and of course maintain the high employment potential as well follow all the government policies to cause social upliftment too. And then they want us to build world class railway stations, my foot. It is adding insult to injury.
It is a wonder we are surviving and doing all these things, carry almost double the staff strength and with hardly 30% really working, and still keep costs so low as to even end up paying dividend on the great help said to have been received from the central government.
The government does not have to courage to make the capital values as zero value, like Singapore did for railway. Nor do they cover the costs of social burdens carried by railways.
We lack maturity on the part of the government like China has.
Now look at China. Who is funding the entire High speed technology or the expansion of railway network?
Can Government of India today take a decision, that we release Rs 1000b annually for network expansion and modernisation with full freedom to function for the railways?
And this capital infusion will be with zero capital cost to railways, that means railways should generate enough operating surplus, with no dividend liability.
Are you all aware the Konkan Railway carries almost Rs 1000 cr as capitalised interest for the actual project cost of Rs 2500 cr and then over Rs 3000 cr, annual interest burden at 10% is loaded on the small corporation! It is actually a killing proposition. We have no courage to change some archaic British rules and with glee other mandarins play with railway guys. It took more than 7 years to fight for converting the loan assistance being given for servicing loan, in to preferential capital shares, with the result, the company was paying interest on interest and it was a nightmarish book-keeping, reflecting a sadistic administration. Then Mr NP Singh of Planning Commission tells me that the corporation is a huge loss making company, and with negative net worth cannot be allowed to execute projects for others to earn some money!!!
I cite this as only an example of our attitude.
There is no dearth of vision amongst railway mandarins. But they have a restriction and constrained by the vision of India. Does India have a vision statement? Railway is a mere cog in the wheel which has to tailor their vision to the same. if India has myopic vision, since Railway has to see through the same eye, will also be having myopic vision.
Actually many smart mandarins of Railways have to accept the limitation and function within the constraints of total distrust, abuse of vigilance, outmoded stores procurements codes, disciplinary rules, frowned upon innovation as it does not have rules for managing, making service a game of surviving snakes and ladder game. The vision of every officer is to seek the narrow path of not getting embroiled in some unwanted controversy and remain as anonymous as possible, to peacefully retire at the highest possible level as luck would permit, and settle down for a drawing monthly pension.
If we expect railway to have vision, first the Planning Commission must have a vision for India and what kind of railway they want.
All infrastructure modernisation and expansion, high speeds technology, policy make over from British manuals to become liberated to treat Indian company as Indian, for the purpose of open funding and development with public money without throwing in the gamut of CBI and Vigilance. Do we have self-confidence to trust each other, Indians among themselves.
Corruption and self deceit with hypocrisy cannot have vision worth a toilet paper.
Printed from ECONOMIC TIMES, 23 Feb 2010
Railways should transform its structure and culture
23 Feb 2010, 0713 hrs IST, Raghu Dayal,
http://economictimes
Comments