Pratim Ranjan Bose
The expectation is fuelled by the Prime Minister Narendra
Modi who has pointed to the pathetic state of rail services in India
Why can’t rail stations are like airports? Modi asked.
His government is reportedly giving final touches to a
plan for the much-needed overhaul of the Indian railway system with the help of
private capital.
Starved of funds
There is little doubt that the Railways is in need of
quick fund infusion.
With Rs 90, out of every Rs 100 earned, spent as running
expenses (excluding finance cost), there is little money available for capital
spend.
Successive governments in the past two decades kept
promising capital outlay based on either allocations from the general budget or
private sector participation, popularly referred to as a
public-private-partnership (PPP) model.
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But even that was insufficient to match the demand. Leave alone the mind-blowing $ 116 billion annual investments in the Chinese rail systems, India
The biggest failures are the schemes drawn on the PPP
model. Though described as private capital, in many cases such projects are
proposed to be funded by cash-rich State-owned companies such as the national
miner Coal India Ltd. The miner badly needs creation of evacuation logistics to bring assets into production and, don’t mind paying for it either.
Yet, there has hardly been any progress in these
projects, for years or decades. And, that too even after making the due
payments to the Railways, as CIL claims. The cash-starved Railways diverted the
funds to the projects for reasons that are more political than anything else.
A political fiefdom
Former railway minister Mamata Banerjee (now the chief
minister of West Bengal) created a classic
Mamata was then an important coalition partner of the
Congress-led UPA government in Delhi West Bengal politics.
She is not an exception in this brigade.
As the world’s eighth largest employer, and its vast reach across the country,
the Railways has been an important vehicle for governments in Delhi to
make political gains.
However, the story took a vicious turn with the rise of
regional politics, which in turn resulted in successive coalition governments
at the Centre, especially since 1996.
The Railways became a prime victim of such a reality.
Recruiting tens of thousands unskilled staff from the
home state of a minister; strengthening the grip of crony capitalists (read
mafias) in the name of privatising peripheral services (like catering,
housekeeping and so on); investing in a rail factory in his/her Parliamentary
constituency or even building a flyover for easier access to minister’s
residence – the Indian Railways was reduced into a fiefdom.
And, not many were vocal enough against such gross misuse
of power. Worse, some like the RJD leader Lalu Prasad Yadav, were showered with
accolades, even from the so-called well-meaning people.
It is a different matter that Lalu, the proponent of
“no-passenger fair-hike policy”, actually hastened the decline of Indian
Railways.
Ask anyone in the know and, he will tell you how crony
capitalists took the system for a ride in the recent past.
Change the culture
Building swanky rail stations is fine, but what is more
needed for Indian Railways at this juncture is the bitter pill of reforms.
There is little reason why the Railways, that cannot run
trains in time, will run a host of ancillaries - right from wheels and axels to
wagons, coaches, engines (locos) and so on. The products, far inferior by
global standards, defy all economic logic.
Can Modi ask the Railways to disinvest such
facilities, lock stock and barrel and focus on core services? Can he throw the
crony capitalists out of the system? Should the Railways stop announcing new
services and new projects until the existing ones are implemented?
Perhaps, he cannot, at least not in the immediate future.
After all, at stake is the identity of Narendra Modi the politician.
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