Charge passenger fares correctly, reduce OPEX for IR’s Survival; Borrowings from LIC or World Bank do not help much: says E.Sreedharan

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E.Sreedharan is definitely not impressed with the pace of reforms in IR. He feels reforms in IR is not as fast as it should have been, and the Govt is not taking corrective actions in time, instead approaching different ways to fix the issues which will not help IR. He says Madhavrao Scindia’s “computerisation of reservations” is one of the best reforms in the history on IR which has visible impact on the citizens of this country, passengers are actually benefited with drastic reduction in waiting time and longer queues are cut down at Railway Stations due to Computerisation. He suggests that the current dispensation shun non-core activities and charge passenger services “correctly” atleast from now; since it’s a question of survival; argues Sreedharan

He shows no signs of slowing down at 83 and thinks that Union Railway Minister Suresh Prabhu could do well to increase his pace of work and take some unpopular measures. While the Indian Railways has been working on a high speed train for quite some time now, Sreedharan may just beat them to have the first train to run at 350 kmph in his home state Kerala by 2020. He tells Bhavna Vij-Aurora that the Detailed Project Report (DPR) of the 550 km line between Thiruvananthpuram and Kannur will be ready by March 2016.

“The reforms in IR are not going as fast as it should,” he said.  He headed a one-man committee recently, to look into the issue of delegating tendering and commercial powers to general managers.

Sreedharan argued for increasing the fare if necessary. “Suresh Prabhu has started well but pace has to be much much faster. Investment is required in Railways but don’t look to borrowings only, look within, reduce expenditure, increase revenue…Why are we so shy of increasing passenger fares?” he told.

“I would suggest charge services correctly; increase fares if necessary; reduce operational costs,” he said adding that costs can come down by 30-35%.

Sreedharan said, “I have suggested all this to the minister.”

He blamed the transporter for sitting on the report of the Anil Kakodkar-headed Safety Committee. “The last Safety Committee I was a member, we had recommended measures and process. None were unpopular suggestions but there’s been no implementation of the recommendations,” he said.

The Metroman argued that railways should withdraw from the non-core activities which have impact on its finances. He questioned why the transporter is running a college for mechanical engineers for railways when there are hundreds of colleges educating mechanical engineers.

“It was an old system started during the British when there were no mechanical engineering colleges, it should stop now,” he said. Sreedharan added, “Also, don’t run schools. Education is a state subject and is being offered by all states.”

Arguing that productivity needs to be increased, he said, “The most important is to change the work culture like several PSUs have shown…turn around the way IR works.”

“Indian Railways are behind by 20-25 years to the rest of the world. Railways is an excellent government department…..but change work culture, instill a love for the organization in the people……privatization can’t be the answer to everything,” he said.

Sreedharan says Railways is over staffed and some tough decisions needed to be taken. “Take unions into confidence, it’s a question of survival. We can’t depend on World Bank all the time. Passenger services should be profitable, charge it correctly.”

The advantage of increasing passenger fare is that it doesn’t lead to inflation while an increase in freight fares will immediately increase prices, argued the former DMRC chief. He also said that the current alignment of Kashmir rail link will not work. “The alignment will not work, my report said so. If Kashmir has to continue to be a part of India, the line has to open…why not implement it properly? Take criticism and make changes,” Sreedharan said.

Here are some of the excerpts of the conversation with E.Sreedharan:

Q: What do you think of the railways’ performance under the NDA regime?
A: There were high expectations from the new government. Railways do not seem to be taking off. The steps that were needed have not been taken.

Q: Can you name some?
A: Railways cannot survive on borrowings. That is the tendency right now. Borrow from LIC. Borrow from World Bank. They have to return this money. The railways should mobilise resources and generate income. Passenger fares have to be increased and operating expenses reduced. Expenses can be brought down by as much as 35%.

Q: How can it reduce operation costs?
A: Why should the railways be running an engineering institute like the one in Jamalpur? There are IITs and other institutes doing that job. Similarly, they should not be running schools either. Most importantly, the work culture in railways must change to improve productivity.

Q: What do you think is preventing railways from doing unpopular things like increasing fares?
A: The political will to change is required. Nothing big has been done in railways since Madhavrao Scindia’s computerisation of reservations. That was the last big thing in railways, the last big idea.

Q: What do you think of Suresh Prabhu’s efforts at garnering resources and funds?
A: He has started well but the pace has to increase. Borrowings are okay for the short term but there has to be a proper strategy to pay them back. The system cannot survive on that. Unpopular measures have to be taken. Fares need to be increased. Staff strength needs to be reduced. Railways are over-staffed. These are unpopular measures but it is a question of survival of the system. They cannot depend uponWorld Bank all the time for money. Passenger service has to be profitable. They cannot subsidise anymore.

Q: Do you think enough safety measures are in place?
A: Money is definitely needed to make railways safer. But there are reports of various committees, the last one being the Kakodkar committeeof which I was a member. We gave concrete suggestions about improving safety measures and also doing away with all railway crossings where accidents happen frequently. It again comes down to work culture. Overbridges have to be made to eliminate railway crossings and permissions and approvals are needed from the railways, and they take months and years to come.

Q: What is the status of the high-speed train project in Kerala?
A: It is being executed by DMRC and a feasibility report is ready. A DPR is being prepared with the help of Korean and Japanese experts. It will be ready in March 2016. The distance of 550 km, between Thiruvananthpuram and Kannur, will be covered in two-and-half hours.

Q: How do you think the Delhi Metro is doing now?
A: Expanding the metro network is good but the government has to take steps to stop proliferation of private vehicles. I don’t understand why the government is not taking any initiative. It should improve public transport and allow private operators to run bus services. There should be low floor, narrow, fuel efficient buses running on Indian roads, especially in the NCR. The government should allow private parties to ply buses, give them incentives and make it profitable for them. As incentives, the government can do away with registration tax and road tax which together account for 25% of the cost. Public transport scenario can change in one year in the Capital.