FURTHER DETAILS are emerging about the Rakesh Mohan committee’s report into restructuring of Indian Railways (RG 9.01 p557). Speaking to The Hindu Business Line, Dr Mohan put much of the blame for IR’s current financial problems on poor investment decisions in the last decade, in particular the gauge conversion programme and other projects with a low financial return. IR had, in his view, also failed to appreciate the significance of economic and industrial changes for the freight market, concentrating on bulk goods rather than lighter but more valuable traffic. Winning back rail’s lost market share will mean restructuring the freight business and providing a full logistics service, he feels.
Restructuring should also include hiving off activities that are not an essential part of the railway. Mohan believes outside contractors could handle many peripheral tasks more efficiently than IR, a suggestion that quickly generated strong resistance, as did a proposal that a chief executive be recruited from outside IR, and possibly from outside India. We await decisions by Railways Minister Nitish Kumar with much interest.
