Railway in the red
February 27, 2006  Monday Dawn Editorial

INDIA’S Railway Minister Laloo Prasad Yadav told the Lok Sabha on Friday that Indian Railways, on the brink of bankruptcy just five years ago, had achieved a miraculous turnaround earning a record profit of 2.47 billion dollars.

The extra cash will be used to finance an expansion in the country’s rail network, already among the largest in the world, and allows Mr Yadav to also take the credit for cuts in fares. Compared to that, the state of the railway system in Pakistan couldn’t be worse.

In 2004-05, the Pakistan Railway had incurred a loss of Rs 3.56 billion, which was over Rs 900 million more than even the revised target of Rs 2.6 billion. And in the first quarter of fiscal 2005-06 the PR had a shortfall of over a billion rupees. The reason for the sharp decline has been attributed by railway officials to a surge in oil prices and in operating costs, which have also caused the PR to levy a fuel surcharge on all travel beyond 51 kms.

However, the fact that Pakistan Railway is running at a loss is nothing new; it has been the case for a number of years. Given that both Pakistan and India inherited the same rail network and infrastructure, what could be the reason for Indian Railways doing so well while the PR is stuck in a rut? One key factor is said to be India’s booming economy which has contributed to a sharp rise in freight as well as passenger traffic. However, Pakistan too has been experiencing high GDP growth rates for a few years but this does not seem to have improved the PR’s precarious state. Clearly, the problem lies in the way the system is run and managed. Another reason for the decline is the increasing popularity — and promotion, for political reasons — of other modes of transportation of goods and of travel. Besides, successive governments have not given the railway system the priority it deserves, often promoting road and air travel at its expense, and spending large sums on building new highways instead of trying to improve the operations of the PR, ensuring better travel facilities and services.

As the recent turnaround of the Indian Railways shows, public-sector corporations needn’t necessarily be white elephants. For a number of years, various senior railway officials have made the sale of the organization’s assets, especially land, a key plank in the reform process. However, as the experience of leasing railway land for a golf park in Lahore has shown, this is not the right approach because the proceeds from the lease did not have any discernible impact on the PR’s financial state.

What the PR needs to do is to get back to the basics. This means having a train service that is affordable and runs on time (regrettably, these days a train running late is the norm) and on a track that is extensive and safe to travel on. The whole idea is to make the journey more comfortable, especially since train travel could be a good substitute for road or air travel because it is far safer and cheaper. For this a complete overhaul of the system is called for. The security issue is also important but it has cropped up only of late and is linked to the country’s overall law and order situation. There is also the matter of dead wood, which the PR must shed. Inefficient staff needs to be weeded out, and this will help cut down the PR’s massive salary bill.