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This is not the right signal for the railways

ht view Updated: Apr 16, 2015 01:01 IST
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Another report on the Indian Railways, this time by economist Bibek Debroy and his committee of seven persons, has been put up on the Railways’ website so that ‘comments can be received from everyone and not only from people within the Railway system or the Railway Ministry’.

Once this second round of consultation with stakeholders, including feedback through conferences and workshops, is over, the ‘final’ report is expected to be submitted in August.

Apparently Debroy intends to cover all his bases so that the acceptance of his committee’s recommendations and implementation on the ground — perhaps the most crucial part of the entire exercise — is initiated and completed.

This comprehensive tome covers subjects that delve into most fundamental issues such the role and purpose of the Railways, why choice, competition and autonomy matter, etc.

As a champion of market economy, which in a democratic society is based on the principles of choice, competition and autonomy, the committee expects to give ordinary people the freedom to choose between competing sellers on the vast 65,000-km rail network.

It expects to lower costs and prices, improve customer service, spur innovation and optimise resources.

The report claims that in pursuit of these fundamental principles, country after country has broken the monopoly of its State-owned railways. The results of these efforts have been spectacular, with improved services, empowered and happier customers, and, most importantly, rail companies’ stronger balance sheets, with the State no longer having to carry the financial burden of subsidies.

In its euphoria to provide a new roadmap for the Railways, with private players pitching in, perhaps the committee has failed to go deep into these initiatives on the European railways, whose tariffs soared, and most of the rail systems such as the one in Britain still provide huge subsidies to infrastructure companies, which remain State-owned.

In short, the rail-operating companies make all the profit while the taxpayer ends up paying for the losses.

Moreover, the Indian Railways is not the last State monopoly in the world as claimed in the report. China and Russia are very much in the game, though in a different garb.

And unfortunately, the example given by the committee of breaking State monopolies in telecom, aviation and the electronic media is similar to comparing oranges and apples.

While the skies are accessible to any airline that pays the licence fee, sticks to the slot allotted at the airports and obeys the air traffic controller’s instructions, and the telecom operator or a TV channel handles its traffic on the wavelength exclusively provided to it, the rail track needs a single entity directing trains on to it.

Herein lies the crunch. For, all private players running their ‘high-tech’ trains on the Indian Railways’ tracks would be competing for this limited resource, along with the Indian Railways’ own super-fast expresses and freight trains, unless they opt for laying their own tracks.

Who gets the priority to run its trains on the already overcrowded tracks and how would disputes be resolved? Perhaps room for one more regulator?

Opening up the container business to private operators almost a decade ago has been far from happy for Container Corporation of India Ltd, a rail PSU being embroiled in litigation, with the Competition Corporation of India taking up the cudgels on behalf of private players.

RC Acharya is a former member of the Railway Board
The views expressed by the author are personal