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Why rail minister can't go slow in fight against corruption

By focusing on safety and service, the railway minister has got his priorities right. But he hasn’t touched on corruption, writes Subir Roy.

ht view Updated: Jun 30, 2014 11:12 IST

After a long time the country appears to have got an effective railway minister in DV Sadananda Gowda. He has come with a positive reputation and lived up to it with a quick decision to hike passenger fare and freight rates as also his initial comments on the task ahead and how he wishes to fulfil it.

His key problem, though, is that he has not identified one effective weapon he could have had in his armoury. This is really not his fault but that of his party and the system that it has chosen to belong to. So at the end of the day Gowda may be able to do just a little despite having almost everything going for him.

Gowda, known for his clean image, briefly became chief minister of Karnataka when BS Yeddyurappa, the first BJP chief minister in the south, had to resign following the Karnataka lokayukta moving against him. One of Gowda’s key acts as chief minister was to introduce the Sakala scheme, which promised time-bound delivery of government services. But Gowda’s tenure as chief minister was shortlived as Yeddyurappa was able to get the national leadership of the BJP to oust him as he was not doing the bidding of the discredited former chief minister.

The clear-headed efficiency that Gowda may bring to his job is apparent from his sense of priorities. His first concerns are safety, security and service and then, only then, speed. This rather downgrades the pet project of the BJP — a high-speed rail network — though he has separately plugged for it in line with the party’s thinking. My guess is that by the time he gets a handle on the monumental threesome, it will be time to go to polls again.

In his first weeks in office, the railway minister has also done one right thing and expressed one positive thought. He has had a meeting with the iconic E Sreedharan, who has delivered the Konkan Railway and Delhi Metro. If Sreedharan were younger and put in charge of the special purpose vehicle for bringing in the high-speed network then it would in all probability have taken off speedily. The issue of funding could also be resolved as Gowda appears to be very open to ideas of public-private partnership and foreign direct investment.

Global high-speed railway equipment manufacturers will be happy to take a stake in the project to secure large orders. Equity via the FDI route for such a long-gestation project will be difficult to come by but long-term concessional finance, which will also serves the purpose, can come from development agencies like the Japanese one already engaged with the dedicated freight corridor.

But there is one problem in all this. If Sreedharan starts a massive operation to create the high-speed network he will invariably poach some of the most capable railway officials from the railways proper. Now the supply of these is not just finite but fairly limited. This will denude the parent of the best skills currently available with it and amount to a setback. This is particularly so because the recent spate of accidents, some through fires on running trains, indicates the organisation is in a state of crisis. At such times, if you want to dramatically turn things around, you need all capable hands on deck.

Gowda has also correctly highlighted the critical state of railway finances and pondered how they will fund all the investments needed for the projects already announced and launched. His observation that at current rates of funding, some of these projects will take 30-50 years to complete is telling.

The one weapon he has availed of, which was studiously sidestepped by most of his predecessors, raising passenger fares, will not be enough. But if fares still have some leeway, the case of freight is different. Raising these rates significantly (that’s where the big money is) will be counterproductive, leading to further surrender of market share to road transport.

Since budgetary support will be severely limited where does Gowda go from here? Unfortunately, he has chosen not to dwell on one major way of making ends meet — by tackling head on the issue of corruption. It is as layered as it is endemic in the railways. A recent study available to the railways points out that in three years the railways spent on repair and maintenance of capital assets as much as it takes to acquire them in the first place.

Corruption in tendering for repair and maintenance, and a lot else, is entrenched. Gowda has lamented that no more than `25,000-30,000 crore is available yearly as investible surplus to the railways. If by addressing the corruption in tendering the railways can save a few thousand crores a year, that will be a significant additionality.

But there may be a reason why a practical politician like Gowda is not banking much on cutting down corruption. That is not a key agenda of the BJP, as it is of the Aam Aadmi Party. The BJP wants to get things done and not acquire a corrupt image like the Congress. It will take pains to ensure this and not allow entrenched negative practices to get in its way and certainly distance itself from those party men who come under a cloud.

How significant corruption is in the railways can be gauged from the fact that fires in running trains have spread quickly, turning them into major accidents with high fatalities, because the railways’ declared policy of using flame-retardant material for passenger coaches did not deliver. If the enquiry reports finally bear this out then it will point to corruption, compromising the tendering process for material used in a unit like the Integral Coach Factory in Perambur.

So the railways will probably run a bit better but not overmuch so and in significant ways it will be business as usual.

Subir Roy is a commentator on business and economy
The views expressed by the author are personal