Monday, June 12, 2006

Prof G Raghuram, IIMA on the Jumbo that can tango ..

Here is a writing from Prof Raghuram, IIMA, of May 2006.
Take some time off to go thru the text.

Reduced wagonturnaround time from seven to five days, improved train
loading from 3200 tonnes to 4000 tonnes, permitting private
players to run container services, allowing 24 hour loading
unloading of wagons, increasing number of coaches,
occupancy and speed, reducing catering expenses and parcel
losses are some of the steps taken by him to boost the
bottomline of IR.

Improved signals, optimum utilisation of tracks, moving
signals from tracks to locomotives, safety, optimal port freight
handling and information processing enabling fast decision
making are some of the areas where attention is being
focused. That is why GE is abegging at the doors of IR for
a slice of the pie of signalling.

Reproducing the text ..

The great Indian Railway story: This jumbo can tango

Saturday, May 27, 2006 22:22 IST

G Raghuram

I have been observing the Indian Railways (IR) for over
three decades now, but the initiatives of the Railway
ministry in the past two years have been of particular

In 2001, this behemoth was on the verge of collapse.

The main problem was that the decision-making process at
the top management level was not in line with efficient
utilisation of costs. It resulted in insufficient returns
and financial productivity was extremely low.

But 2004 saw the dawn of a new set of initiatives, led by
Railway minister Lalu Prasad Yadav. Gradually, the
organisation’s operational and projected finances began to
look impressive, and I started studying the movements in
the IR closely.

It became apparent that Lalu’s initiatives were making a
difference. He started 24-hour loading-unloading of goods
wagons, legalised hitherto illegal ‘extra loading’ of
wagons, and introduced competitive bidding for movement of
goods in containers.

As the IR understood that demand will fluctuate according
to changes in price, it stopped taking its clientele for
granted and imbibed better customer orientation, especially
in its freight traffic services.

I feel that bringing in kulhads (earthen cups for tea) was
a populist move, which attracted more flak than
appreciation, but Lalu was not deterred. It illustrates
what defined the turnaround — determination to implement
despite criticism.

The biggest hurdle for the IR all these years was not the
lack of innovative ideas, but the lack of willingness to
implement them. When Lalu took over, he was in a political

The Railway ministry seemed like the last opportunity for
him to retain his popularity. Driven by a keen
understanding of the problems at the grassroots level, the
rustic leader was also a clear thinker, knew how to use his
political clout, and was motivated enough to take risks.

But the overall success cannot be credited to Lalu alone.
He was influenced by his team, and convinced by numerous
officers over a long period of time. But a special mention
needs to be made of officer on special duty to the Railway
minister, Sudhir Kumar (IAS).

Kumar had a sound understanding of the Railways’
operations. He recognised the minister’s ambitions and
translated them into opportunities by giving the minister
productive ideas.

Even today, the IR has more challenges than it can handle.
Given the rapidly changing environment, the IR needs to
learn to respond to change swiftly. I feel sustainability
is a question mark.

Safety is still the biggest challenge that the IR needs to
address. Optimisation of track utilisation is also
required. Signals could be moved from tracks to

The greatest opportunity for the IR today is ports. As much
as 25 per cent of the IR’s total traffic comes from ports,
and it should improve port connectivity by acquiring
advance information systems for handling port traffic, and
invite public-private partnership for key port areas.

The IR can function as an umbrella, promoting private stake
in appropriate areas. That’s the way to growth. It should
start niche services like luxury trains, which would be
good revenue generators. Speed being a requirement, the IR
needs to streamline traffic movement, and introduce
flyovers or a bypass when two tracks merge.

With an ambitious railway minister at the helm, and a slew
of bold initiatives, the mammoth has saved itself from
extinction, for now. But the giant needs to become nimble
to be able to sustain the turnaround.

(The writer is professor, public systems group, IIM,
Ahmedabad. He was a member of the Rakesh Mohan Experts’
Committee on Indian Railways, 2001.)

The news report that appeared in


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