(This article appeared in the Business Standard, 2002-07-09.)
Railways is all about the 'long haul'. Its unique strength lies in not only the economies of scale achieved through bulk transport, be it goods or passengers, but its ability to provide a seamless and assured transport over innumerable state boundaries. The advent of IT age has now ushered in an era of command and control over its far flung operational areas from a single central point.
The over two decade old re-organisation of 25,000 miles network of Union Pacific Railroad (UPR) in United States has become an oft quoted case study for the students of management trying to figure out pros and con of de-centralization versus centralization. Faced with mounting losses and financial constraints the UPR decided to make the most of its unique geographical location viz. straddling the east-west corridor.
In a major revamping of its systems it decided to place all it eggs in one basket, at Omaha in the state of Nebraska to be exact viz. from where streams of orders went electronically, instantly obeyed and compliance confirmed within seconds, setting in motion transport of thousands of train loads and their precious cargo, which had to be picked up and delivered to precise schedules if they had to be one up over the highly organized road sector.
A 200' wide wall of TV monitors covers each and every station of the UPR's network at its Centralised Train Control System located at Omaha enabling its operatives to keep tabs on all train movements, while the Marketing effort is carried out from its offices in St.Louis. Predictably the higher efficiencies and faster response time arising from a centralized facility have contributed substantially to UPR's bottom line over the years.
In August 1947 India had inherited from the British no less than 42 big and small railway systems in operation. A well thought out reorganization exercise, with a clear cut objective to reduce unnecessary overheads, duplication of facilities, and most importantly eliminate problems associated with co-ordination between various systems, resulted in the then Hon'ble Minister, N. Goplaswamy Ayyangar favouring formation of 6 zones. K.C.Bakhle the then Commissioner of Railways (equivalent to the present Chairman Railway Board) a true blue seasoned Railway man thought otherwise (certainly better than the poor politician) and suggested 9 zones. He quit in a huff when his proposal was not acceded to.
Over the years innumerable committees have pored over this subject, a significant step being taken by the Railway Reforms Committee headed by H.C. Sarin, a seasoned bureaucrat who ended up being India's ambassador to Nepal. His committee produced no less than 25 volumes on various aspects of Railway working spread over a period of nearly 4 years culminating in 'Synopsis', the 26th. volume making its appearance in April 1985.
No less than 22 sub-committees under the Chairmanship of mostly retired railway officials were involved in this Herculean effort. Being aware of the complexities the committee recommended formation of ONLY FOUR Zones, that too spread over three phases, the Phase I involving only TWO zones!
The first zone proposed consisted of most of the meter gauge sections carved out from Northern and Western Railways with headquarters at Ajmer. This was the MG network of system of erstwhile B.B.&.C.I., (Bombay Baroda and Central India Rly.) a private company now known as the Western Railway. Ajmer was the headquarters for the meter gauge system for all purposes though it still reported to the BBCI's headquarters at Churchgate in Mumbai.
The second zone was proposed to be carved out of the sprawling Central and South Eastern Railways with headquarters at Jabalpur. The 2nd and 3rd phases involved setting up of 2 new zones with headquarters at Allahabad and Bangalore respectively. While no time frame had been given it was generally understood that the reorganisation was to be deliberate and well thought out, planned in detail, and a carefully executed exercise spread over a couple of decades if not more.
The committee was however emphatic in its observation that ethnic, linguistic, territorial or such other considerations should not be taken into account while considering formation of new zones/divisions and reorganization of territorial jurisdiction of the existing ones. They also noted that such an exercise would involve considerable expenditure and every possible effort should be should be made to keep the number of additional zones/divisions to the bare minimum.
Immediately on taking over as the Minister for Railways, Ram Vilas Paswan, the shrewd politician that he is, lost no time in digging out this report. He knew the tremendous political mileage he could gain in one stroke by announcing 6 new zones in one go, and that's what he did one a fateful morning in 1996. The two new Zones he conjured up of course included Hajipur, his own constituency and Bhubaneshwar to please his Janata Party colleagues.
Fortunately funds constraints and continued poor performance of Railways discouraged successive Ministers from undertaking this expensive exercise which by now with massive gauge conversion, introduction of end-to-end running of block rakes, and enhanced communication network has become somewhat redundant.
However over the last decade or so no less than a dozen new divisions have already appeared on the Railway map taking care of any logistics shortcomings if any. Though faced with growing financial constraints Nitish Kumar unfortunately has once again succumbed to political pressures and now decided to make Paswan's dream a reality, hoping perhaps to gain considerable mileage on his own !
Good management practice dictates a span of control of not more than seven or eight. Konkan Railway with headquarters at Goa is set to join the IR system as the 16th. zone, when its 10 year mandatory pay back period is over. However even before that a stage is already set for another reorganisation, this time may be of the Railway Board which will now have to cope with not only the 15 zones but also the 6 major Production Units, 21 General Managers in all! Perhaps regrouping the 15/16 Zonal Railways as North, East, West and South sectors would be the next logical step to maintain an effective span of control and delegate responsibility for decision making.
However the important question is not whether such an exercise of reorganisation is inescapable or not, but whether the Railways can afford to indulge in the luxury of proliferation of overheads and power centres, spending scarce resources on creation of non-performing assets such as brand new office buildings, staff quarters and other supporting infrastructure etc. Unfortunately the political leadership in India, which ever party they may be from, can seldom see beyond their immediate gains and are only too happy to hand out populist goodies with never a thought for the long term impact their actions may have.
Sarin committee's specific objective that redistribution of staff and other support systems from the existing zonal headquarters from which the new zones are proposed to be carved out, is likely to remain elusive! No doubt the 6 new posts of General Managers and scores of Head of Departments and other supporting staff will open up avenues of promotion, create new jobs and lead to large scale induction of personnel from the beneficiary states. However it is ultimately the common man who will end up picking the tab, through the annual ritual of enhanced freight tariff and passenger fares, popularly known as the Railway Budget!
The exercise basically involving re-distribution of the same piece of cake has, as expected, left some of the Chief Ministers sore over transfer of certain divisions to new zones. Apart from adding to overheads and becoming a constant drain on Railway's finances, the exercise is not likely to generate any new freight or passenger traffic. Far from improving its managerial capabilities the number of zones enhanced from 9 to 15 would only make the Railway Board's task of coordinating the vast 62,000 kms. network far more complex!
With Hajipur in Bihar, Hubli (not Bangalore) in Karnataka, Jaipur in Rajsthan, Jabalpur in Madhya Pradesh, Allahabad in Uttar Pradesh and Bhubaneswar in Orissa, a stage is now set for the remaining ststes including Manipur to clamour for its own piece of cake, a brand new Rly. Zone with its headquarters preferably located in the state Capital where the Chief Minister could summon the erring General Manager and show him who is the boss!
Indian Railways are still struggling to cope with the Rs. 35,000 crores worth of backlog of projects and with the total disruption in smooth working which the new zones promises to bring in its wake, the 1.7 million behemoth may soon become a basket case. That of course is perhaps going to be some one else's problem, or is it?