INDIAN RAILWAYS
Losing Steam
For long considered a microcosm of India, the Indian Railways is now on a rusty track to ruin. Ashok Malik on what ails the country’s biggest employer and how to fix it
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EVERY SATURDAY evening, with 15 minutes to go for midnight and amid the arresting landscape of upper Assam and under the clear skies of Dibrugarh, the Vivek Express begins its journey. For four nights and three days, for 82 hours and 40 minutes, it trundles along. Its wheels cover state after state — West Bengal and Odisha, Andhra Pradesh and Tamil Nadu. Finally, after 53 halts at various stations down the eastern coast of the country, India’s longest train journey ends — and the Vivek Express finishes a 4,243 km marathon. It chugs in, tired but proud, and arrives at Kanyakumari station on Wednesday morning at 10.25 am.
In many ways the story of Vivek Express epitomises the romance and romanticism of Indian Railways, and encapsulates all that Indians want to believe of their iron horses — the grand locomotives that unite this country. There is an elevating idea to the Railways. This is an institution (and more its predecessors in the 19th and early 20th centuries) that brought Indians closer to Indians like never before and was, in a sense, the building block of Indian nationhood. The Second-Class train journey, the one that united the Brahmin and the Untouchable, the Mahatma and the merchant, was the sort of legend around which the national movement grew.
Those ideas and that idealism are long past. Yet, to this day, generations of Indians recall that nostalgic train journey of some childhood idyll — the family holiday, the Toy Train in Darjeeling, dinner after the stop at Mughalsarai, sipping tea at stations through the night as the great passenger trains of India boomed along the countryside, linking east to west and north to south, Kamrup to Kutch and Kashmir (or at least Jammu) to Kanyakumari.
The idea of a train journey is enough to make us smile, bring back thoughts from the crevices of amnesia, some happy memories. Yet, and here lies the grim paradox, we would avoid that train journey today if we could. Buses, cars, flights — if we can afford them — almost every mode of transport seems to take precedence to the train. It’s only when all other modes absent themselves — if the journey is too long and the alternatives are too expensive — that the 21st century Indian will board the train.
To be sure, a number of Indians use trains — 23 million passengers every day, close to 7.2 billion (six times the population of the country) every year. Even so, Indian Railways’ market share is falling even if absolute numbers are rising. Beyond the figures, there is a story of India’s gradual estrangement from its trains. It is also the story of the slow decline of Indian Railways, a wondrous legacy that India has allowed itself to slowly poison.
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Despite the huge numbers of passengers it transports, it is worth noting that Indian Railways moves only 10 percent of India’s long-distance or suburban passenger traffic. When it comes to moving freight, the 2.65 million tonnes it transports every day seems dramatic — but is only 30 percent of the freight traffic in India.
It wasn’t always like this. In 1980, the first National Transport Policy Committee was set up under the late BD Pande, former cabinet secretary and later governor of West Bengal. It recorded that 74 percent of passenger traffic and 89 percent of freight was dependent on Indian Railways. What happened in 30 years?
It is tempting to look upon the early 1980s as the starting point of Indian Railways’ decline. ABA Ghani Khan Chowdhury, the Congress strongman from north Bengal, became railway minister then and was quickly given the sobriquet “Minister of Malda”, a reference to his parliamentary constituency. Khan Chowdhury used the Railways to nurse Malda and attempt to win back Congress influence in West Bengal.
The first attempt worked and Malda still worships its “Barkat da” years after his death, remembering the jobs and infrastructure that Indian Railways created. The second mission — reclaiming West Bengal from the Left Front — failed but nevertheless Khan Chowdhury had designed a template that was to be used by later ministers.
In the 1990s, as the Indian economy began to open up and internal and external trade grew, it should have been Indian Railways’ moment in the sun. Instead, borrowing from the Malda model, a succession of coalition-era railway ministers — Ram Vilas Paswan, Nitish Kumar, Lalu Prasad Yadav — began to see Indian Railways as nothing more than a patronage machine. The decline reached its logical conclusion — or logical absurdity, depending on how you see it — under another Rail Bhawan dispensation from West Bengal, under Mamata Banerjee and her handpicked railway ministers.
Which route should the Railways take? The dilemma was obvious in the political flashpoint this past week. Prime Minister Manmohan Singh praised Dinesh Trivedi’s budget and acknowledged his bid to raise fares. This didn’t help the former railway minister save his job, however, as Banerjee, Trinamool Congress chief and Trivedi’s party leader, felt passenger fares could not be raised without a crippling impact on ordinary people. Her supporters suggested rather than burden passengers, Indian Railways had to look at different and more sustainable sources of revenue.
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WHAT AILS Indian Railways? The diagnosis can be made by looking at four broad-sweep parameters:
• It is overstaffed and has a far greater employee and wages burden than is warranted. What’s more — no railway minister wants to rectify this.
• It is not focussing on its core area — transporting goods and people across long distances — and is side-tracked by short-distance, uneconomical and unnecessary routes as well as a suburban rail network that should be run by city and state authorities rather than the national railway. Even outsourcing of catering operations is deemed politically incorrect and creates a behemoth that ends up going nowhere.
• Since it lives such a hand-to-mouth existence, existing from railway budget to railway budget and from railway minister’s whimsy to railway minister’s fancy, Indian Railways has little time and money for strategic thinking, visionary planning and spending on technological upgrade. The best illustration of this is that the Vivek Express, the train that links India’s Northeast to the southern ocean, travels at an average of 51 kmph. At a time when China is building an inter-city high-speed railway network with speeds of 350 kmph, this doesn’t seem ordinary, it seems obsolete.
• As a result of all this, the Railways finds itself out of tune with the needs of Indian business travellers and stakeholders — increasingly irrelevant to a growing industrial economy precisely at a time when the opportunities before it are bigger than ever before.
Each of those four factors requires examination. Take the employee burden for a start. Indian Railways employs 1.36 million people. This makes it the world’s eighth largest employer as well as India’s largest — just ahead of the armed forces taken together. The Railways wage bill accounts for 50 percent of its annual expenses. It is not helped by the burden of 1.2 million pensioners, retired Railways officials and workers whose pensions keep growing with successive Union government pay commissions.
At one stage, the serving employee base had crossed 1.5 million and attempts were made to curb new recruitment, to outsource non-essential functions (catering, aspects of train maintenance), hive off some departments as separate entities (Container Corporation of India). Department after department of Indian Railways resolved to cut its numbers. “There was a thumb rule,” says a Railways official, “that for every 100 people who retired, we would take in only 75.”
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By the time Mamata Banerjee became railway minister in 2009, Indian Railways had actually managed to cut 2,00,000 jobs. These were officially listed as “vacancies” but the network was managing just fine without them. Unfortunately, it proved too tempting. Using the excuse that some of the vacancies were in safety-related departments — and ignoring that safety necessitated technology and upgrade rather than just more human eyes and hands — in the past two years, the Ministry of Railways has gone on a recruitment binge.
As Dinesh Trivedi announced in his supposedly “reformist” budget earlier this month, Indian Railways had recruited 80,000 people in 2011-12 and would take in another 1,00,000 people in 2012-13. In two short years, the Trinamool Congress management has wiped out years and years of staff rationalisation.
Can Indian Railways manage by reducing the number of people working for it? Does this endanger safety of passengers or secure passage of freight? The answer is a function of which generation you engage, of people who have worked for the Railways as well of machines that are in use in an organisation that spans several technology eras.
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In the time of steam engines, it required 17 people on an average to maintain and run a locomotive. Today, a high-speed diesel or electric engine requires two or three people and much of the work is mechanised. That apart, the steam engine pulled 1,800 tonnes of freight. The diesel and electric locomotives now deployed pull 4,000-6,000 tonnes. Still newer engines, used in China and the United States for example, can pull 10,000 tonnes of freight. As is clear, the locomotive-to-employee ratio for Indian Railways’ 9,000 locomotives is just not realistic.
WHAT SHOULD be the core area of focus for Indian Railways? It has an expansive network of 7,083 railway stations and 131,205 railway bridges — a quarter of these bridges are over a century old, but that’s another matter — and 19,000 km of track. Is all of this equally important? According to the Expert Group for Modernisation of Indian Railways headed by Sam Pitroda — it submitted its report to Trivedi on 25 February, in his final weeks as minister — “40 percent of the total network… [is] carrying about 80 percent of the traffic”.
This super-busy part of the network includes what Railways officials call the “arterial routes” — the “golden quadrilateral” linking Delhi, Mumbai, Chennai and Kolkata, and the “two diagonals” that run from Delhi to Chennai and Kolkata to Mumbai and criss-cross the quadrilateral. The four mega-cities and the connections between them actually make up no more than 16 percent of the Railways’ infrastructure network — but contribute to 60 percent of the traffic.
Logically, if Indian Railways were run like a business corporation, it would channel its energies in this area. It would invest in, for instance, signalling technology that would allow it to run trains more frequently, and closer to each other in terms of time and distance, than is possible today. The Pitroda Committee even discussed the idea of investing in signalling and tracks and allowing private companies to run their own trains, to complement Indian Railways trains while paying user charges.
It sounds easy in theory. In practice, the 12,000 passenger trains the Indian Railways runs offer a strange mix. Some 5,200 of these trains are intra-city or suburban trains in primarily the Mumbai, Chennai and Kolkata metropolitan areas. Trinamool Congress ministers have inaugurated more trains and projects for Kolkata, of course. In countries such as China, such localised transport is the job of the provincial authorities, not the national railways.
That’s not all. Another 4,200 passenger trains are slow-moving passenger carriers — the proverbial “chuk chuk gaadi”, as an Indian Railways veteran smirks — that travel at barely 30 kmph an hour, stop every 10 minutes or whenever a passenger feels like pulling the chain and jumping off. These trains are often introduced in far-off areas without an adequate customer base, stopping at stations that have no business existing and where there are not even roads to get long-distance passengers to trains. The local populations would be much better served by a network of state highways and village roads, and buses.
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That leaves only 2,600 mail and express trains to fulfil Indian Railways’ core mandate — transporting Indians long distances across the country and between big cities, at fairly rapid speeds.
FRANKLY, THE biggest curse afflicting the Indian Railways is the anachronistic existence of a railway budget, which has been separate from the general budget since 1924. It serves no purpose as outlays for it come out of the Consolidated Fund of India and can be incorporated in the general budget speech. Fare hikes or freight charge revisions in the Railways do not need Parliamentary approval. Indeed even a divisional officer — let alone a member of the Railway Board — has the authority to quote and negotiate freight rates.
So what does the railway budget do? Willy-nilly it becomes a platform for distributing political favours. New trains and out-of-the-blue stations may not be economically viable or even socially necessary — but who will dare deny a powerful MP or an allied party the right to boast to voters and make a symbolic statement? In the run-up to the railway budget of 2012, Trivedi is believed to have received 5,000 suggestions from “brother MPs”.
Such are the pressures of populism that, as was discovered recently, raising ticket prices even slightly can be a nightmare. Could Second-Class rail passengers afford to pay Rs 150-Rs 200 more for long-distance journeys? The issue is not easy to address, especially in an economic system where even airlines — and their economically privileged fliers — get subsidies, hidden or otherwise. Given this, how off-track are fares in Indian Railways?
Raghu Dayal, who served as founder managing-director of the Container Corporation and is the doyen of Indian Railway research in New Delhi, conducted a survey in the financial year 2009-10. Looking at the performance of the 37 state road transport corporations that run bus services in India, he found they charged 52 paise per passenger km. In contrast, the suburban train services provided by Indian Railways in Mumbai, Chennai and other cities brought in revenue of only 13 to 17 paise per passenger km.
It is clear that passengers can pay more — and would be happy to do so if assured better services.
“In the 1990s, India’s rail network was 15 years ahead of China’s,” says Dayal. “Today the Chinese are 50 years ahead of us. They have focussed on long-distance, inter-city services, leaving short-distances and freight movement where possible to roads.” India has lost its way.
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Interestingly, the fare increases Trivedi had proposed would have got Indian Railways an incremental Rs 5,000 crore. While this grabbed headlines, what failed to get attention was an apparent discrepancy in his budget projections for 2012-13: freight in tonnage would go up 5.5 percent, but freight revenue would go up 30 percent. How was this possible? Simply, the Railway Ministry had hiked freight rates in the days before the budget, without even waiting for Parliament. This emphasised the disproportionate burden on freight earnings but also made apparent the cosmetic value of the controversial railway budget.
THE UPSHOT of this is that Indian Railways satisfies neither business customers nor passengers. Freight trains are made to wait and give right of way to even local passenger trains, making more and more companies — especially those in the fast-moving consumer goods sectors — shift to trucks and roads. Forty-five percent of Indian Railways freight traffic comprises just coal. However, instead of treating coal as a key commodity and coal companies and power plants as valued customers, Indian Railways is forced to see them as lower priority than day-trippers jumping on and off trains in a politically-influential state or district.
Pitroda has recommended “commodity-wise key account directors”. He points out Indian Railways can save itself and the country money if it begins to manage coal logistics better. For example, if it is moving coal from location A to B for one client and from C to D for another client, it may ask whether it can offer the clients the option of delivering a given quantity of coal from A to D and C to B instead — if the routes make more sense.
Pitroda has also sought commercial exploitation of Indian Railways’ property and stations using public-private partnerships, as well as modern signalling and introduction of high-speed locomotives on key routes. This will cost money. The proposed 350 kmph, high-speed train link between Mumbai and Ahmedabad will be built over 10 years and cost Rs 60,000 crore. The Pitroda Committee wants the model to be replicated on six other routes, including Delhi-Patna (991 km) and Chennai-Bengaluru-Coimbatore-Ernakulam (850 km). The abolition of all level crossings, another proposal, will cost Rs 50,000 crore.
Implementing the Pitroda report will require Rs 8.4 lakh crore over five years. It is only possible with large-scale private partnerships and even outright privatisation that the Railway Modernisation Group suggests but which the UPA government — whether the allies or even the Congress party itself — would be hostile to. Indeed, it is difficult to see any Indian political party completely buying into the Pitroda blueprint. In addition, there is the Anil Kakodkar Committee on safety that wants Rs 1 lakh crore spent on safety mechanisms over five years (though some of its proposals overlap with Pitroda’s).
That is the dream, where is reality? Frankly, are those gargantuan numbers, running into hundreds of thousands of crores, even conceivable? If Indian Railways finds its pension bill pressing, can it afford such massive infrastructural investments? After all, Rs 60,000 crore is the annual plan outlay for Indian Railways in 2012-13, and it is the highest ever!
There are other factors. The political class would be loath to reduce the employment potential of Indian Railways without the guarantee that those who don’t get these jobs will be absorbed elsewhere. On the other hand, there is the fear that if nothing is done, Indian Railways will go the Air-India way. Conservative voices argue that if too much is done, it could go the Kingfisher Airlines way.
The debate is endless. Nevertheless, without a radical transformation in the manner in which Indian Railways is managed — and without bringing in a rational measure of private players as partners — India’s rail story will keep going downhill. The point is: can the new railway minister, Mukul Roy, see the lantern waving furiously in the distance?
Ashok Malik is Contributing editor, Tehelka.
25-crore in the next six months.
