Speech by Shri Rajeev Chandrasekhar, MP During the Discussion in Parliament on Railway Budget 2009-10

08 July, 2009

Deputy Chairman,

I thank you for the opportunity to speak in this debate on the Railway budget.

Much has been spoken about the Railway budget already by the many other Hon’ble MPs in this house and I would reiterate my support to the some of the points made by Leader of Opposition and Shri Ramgopal Yadav amongst others! I will also repeat those points.

Sir, I will add some points and suggestions from my perspective and analysis of the budget.

Sir, firstly the suggestion that the much vaunted Financial performance of the Railways was less than authentic comes as a shock! I have been amongst those who have written and spoken and waxed elonquently about the performance of the Railways over the last five years and spoken about it as a shining example of a Government entity revitalized and performing to high expectations! Just the recent Railway budget had spoken about cumulative earnings of 90,000 Crores in 5 years or USD 20 Billion! This suggestion that this wasn’t true, coming as it does in the background of corporate misdemeanors and frauds in the private sector, raises serious questions! The white paper promised by the Hon’ble Minister will go a long way to establishing the correct financial and operational picture of the railways – given these doubts and questions!

So first and foremost, my suggestion to the Minister is that this white paper be presented in the shortest possible time and be made available in the public domain.! I would also suggest an amendment to the Railway Act, that makes the Chairman - Railway board and Member Finance, explicitly statutorily responsible for the financial position of the Railways as presented to the Ministry and Parliament. I would also suggest the CAG auditing financial statements of Railways every year and CAG’s Audit Report being part of the papers presented by the Minister to Parliament during the Budget.

Railways is a proud and very important part of our national economy - given its pervasive role in movement of goods and people all around the country, including the remotest and most strategic locations.! Railways and its freight costs also have an impact of the inflation. It is vital that the Railways is put on a path of sustainable growth and a multi-year plan be put into motion. The Railways should be used for more than populism and political point scoring – which unfortunately increasingly it is beginning to look like.

The most important statement in the budget was in the last paragraph of Hon’ble Minister’s speech – the promise of a Vision 2020. I would urge the Hon’ble Minister that this document be developed as a strategic development and growth plan for the Railways – and this must have the following specific focus areas (in addition to anything else that’s put in there).

1.    Rail track capacity expansion

The Railways must remember they are in the business of hauling freight and passengers, and expanding the Railway network must be their pre-eminent focus. The current 60,000+ km railway network must be ambitious and aggressively expanded by at least 50% in the next 5-7 years. This is a target that the Hon’ble Minister must take on and implement with all the energy in her command. This will easily be taken care by track doubling in many years and the Dedicated Rail freight corridors.

2.    Utilization and Efficiency improvements

The Railways must embark on a implementing the latest Signalling technologies through its entire network. There has been much talk about Pilot projects etc for this. But a clear plan to upgrade the signaling technology and hence the throughput of trains and utilization of our network must be completed and rolled out starting immediately. The current approach of installing various incompatible technologies at various pieces of the network is adhoc and is not strategic. I look forward to the Hon’ble Minister’s Vision 2020 addressing this.

The other area of utilization is to enhance track and axle loading – for this, the dedicated high speed, high load Dedicated Freight corridor must be put on the fast track and design of this freight corridor must be done keeping in mind our requirements as a nation for the next 50 years. The Dedicated Freight Corridor will be the single largest Rail expansion anywhere in the world, except China, and definitely the biggest expansion of the Indian railways since Independence. It is an important project for India’s aspirations to be an Economic Superpower and it will transform India’s competitiveness as an exporting and manufacturing hub and bring in tremendous efficiencies in costs to the Retail sector as well. The Railways must focus on this with the same intensity and priority that this deserves, and start its implementation in right earnest.

3.    Project Management

Sir, we all know that the Railways is littered with incomplete projects. In my city of Bangalore alone, I know of various Railway Overbridges and other projects that are small sized but have taken decades to complete, including the famous KR Puram Railway over bridge that took almost 2 decades to complete. There is something very, very wrong in how the Railways approves projects, allocates funds and completes these projects. I strongly urge the Hon’ble Minister to direct the Department to evolve a modern methodology where projects once launched are given the highest priority on funds, instead of the current dispensation where funds are diverted from launched projects to new projects. This is an approach that causes thousands of Crores of economic losses to the Railways due to overruns and delays. So in short, it is not enough to appoint a JS in charge of project overseeing, the Railways must develop a fresh and modern methodology to project conception, management, financing and execution. To start with, I will request that no further projects are sanctioned until all the financing of all existing sanctioned projects are met and completed.

4.    Customer experience enhancement

Sir, I won’t say any more on this. Much has been said on this already in the budget and by my various colleagues. I will only add this - Indian Railways serves the poor and needy sections of India. But that doesn’t mean that the poor and needy sections of India must suffer a poor and often unsafe travel experience. The Railways must not treat its passengers as anything but valued customers and must step upto the plate and give them a superior customer experience. The Minister has promised this, but I caution her that these kind of promises have been made in the past and are yet to translate.

5.    Premium Trains

Worldover in the travel business, it is well known that Premium passengers contribute more to the profitability of a transport operator, be it Airlines, or Trains, or Bus services. I would urge the Indian Railways to target the growing middle class and youth and create Rail travel experiences along with Tourism departments – Railways have done this successfully in Rajasthan and also in my State. But making this a key component of Railways Vision 2020 strategy will go a long way in attracting a % of travelling public away from the Airlines – This has been tried and been successful in Europe, US and other places.

6.    Freight tariff regulator

Sir, we all know that the Railways is a monopoly. Being a monopoly brings with it many bad habits and some have crept into the Railways over the past many years and decades. The area of concern today is the setting of freight tariffs and classification of freight tariffs.

Whilst Parliament is told that freight tariffs remain unchanged, the same is sometimes effected by changing classifications of items. There is a need to bring in transparency into this. I suggest that an Independent Freight Tariff Regulator’s office be created that will be responsible for transparently setting tariffs without favour.

7.    Public Private Partnerships

The last point is about stress on PPP in the budget. I welcome PPPs as a way for the Railways to augment its financial capacity but I would urge extreme caution. The first principle of such PPP is that Railways must benefit and this must not be another PPP that causes the disproportionate profits to the Private sector. I would urge you to use competent external financial advisors and Lawyers from outside to negotiate and structure these PPPs to make them truly balanced and also explore the possibility of a dedicated regulatory office in the Railways that will be responsible for structuring and executing PPPs including that of land.

8.    Railways Financial investments in States and Karnataka

Sir, let me end by reiterating what all my senior colleagues from Karnataka have already stated strongly in both the Houses. The investments in my state fall far below what is being done in other states and can be construed as unfair and discriminatory. We are all people of one nation and the Railways serve the nation and all its people. There is a strong case for relooking at the investment distribution in this budget and ensuring that investments and new projects/trains are done in a more equitable manner so that all states and all people benefit.

Sir, I reiterate that the Railways is and will remain for the conceivable future an important and vital part of the complex equation for our economic progress. The Railways must structurally be architected to meet the challenges of the coming years and not continue the 60 year old status quo. I hope despite me being a lone voice of an independent MP in this house, the Minister and her colleages take note of the points made and incorporate them into their plans for the Railways for this year and the future.

Thank you Sir.