Leading Indian Railways: corporatization initiatives and challenges

Citation

Prabhakar, G.P. (2011), "Leading Indian Railways: corporatization initiatives and challenges", International Journal of Public Sector Management, Vol. 24 No. 3. https://doi.org/10.1108/ijpsm.2011.04224caa.002

Leading Indian Railways: corporatization initiatives and challenges

Article Type: Interview From: International Journal of Public Sector Management, Volume 24, Issue 3

Indian Railways operate around 15,000 trains everyday and carry 18 million passengers everyday which is equivalent to transporting people of 46 countries with minimum population from one place to another. It is a tremendous operation. Indian Railways is a safe, reliable, punctual and quick mode of public transport. Its efficiency and affordable fares have come as a boon to passengers who are increasing in numbers to make use of it to reach destination in time. Mr I.I.M.S. Rana, who as the Chairman (now former) of the Indian Railway Board has been able to enthuse all sections of its staff and has succeeded in getting them to think and work on positive lines. Indian Railways took a very vital decision of restructuring to make it efficient. This was despite very stiff resistance from various quarters, including representatives of 1.5 million staff and officers’ Unions. So much was the resistance that they told Mr Rana on his face repeatedly that if you take such a decision, your name will be written in black letters in the History of Indian Railways for breaking and destroying Indian Railways. However because of Mr Rana’s conviction the railways went ahead and implemented the restructuring. Today, the railways stands as a shining example of what motivation can do to make employees productive.

Interviewer

Could you describe your career starting with education and when you first entered the management position?

I.I.M.S. Rana

I was born in 1943, erstwhile West Pakistan and in 1947 we moved over to the Punjab in India. I did my schooling from Junior Model School and Government Model School in Jalandhar. In the year 1959 I joined Punjab Engineering College in Chandigarh and graduated with a civil engineering degree at the age of 20 years in the year 1963. I worked for one year in the Indian iron and steel company. I appeared in the railways competitive examination because that was the most sought after service for engineers at that time. It’s a competition amongst thousands of engineers in the country. I got second position and joined the service in the Indian Railway Service for Engineers (IRSE) in the year 1964 at the age 21 years. After one year’s training, I joined the working job at the age of 22. I was Assistant Engineer for the first few years of my career. Assistant Engineers job in the railway involved maintenance of the railway track and has a wide jurisdiction with at least 500 people working under my supervision. This role had lot of managerial content in it besides the technical content as it includes organizing and planning things, maintenance of the tracks, construction works and organizing and handling of labour and unions. It’s a tough job right from the day one. That was for the first four years and then I was promoted as Divisional Engineer in the year 1970. I worked for few years there and thereafter became the Deputy Chief Engineer since 1976. In the year 1986, I was Additional Divisional Railway Manager. That’s a quite a responsible position for Delhi Division which is one of the very important divisions in the railways. Thereafter, I was assigned the task of constructing a rail coach factory in Kapurthala in the year 1986. This is now the largest factory in the world for rail coach manufacturing. The targets were extremely tight. The environment was terrible because the completion time given was for two years to construct not only the rail factory of a n international standard but also to start manufacturing the coaches. Normally, such a large project any where in the world takes five years’ time and in this country, should be ten years. In 1986, terrorism was at its peak in Punjab. The saying in the Indian Railways was such that anybody who is posted there, his career is doomed. We completed the coach factory in two years’ time. The first coach rolled out on the 31 March 1988, which was absolutely on target. I picked a lot of management lessons from there and refined my managerial skills and monitoring skills. Even if the work is 99 percent complete but one percent is remaining, it cannot be made functional. So, very fine monitoring is required for any project or any sort of achievement. Thereafter, I was assigned the job of a Divisional Railway Manager at Danapur which is near Patna in the state of Bihar and I was told that this is the worst division of the Indian Railways because of the political system and law and order situation. That was quite a challenge. Thank God, I was able to come out with flying colours. People, customers, staff, officers and the management were all happy. I don’t claim that I brought about all the improvement, which I wanted to. Yet, I could hold my head high as it that was quite a great challenge.

Interviewer

Was Dhanbad included in that division?

I.I.M.S. Rana

Dhanbad was a separate division, but Danapur is in the heart of Bihar with the full political pressure, which you can’t imagine. Thereafter, I was given the job of Nandiyar project as Chief Administrative Officer for construction in Andhra Pradesh. I was sent there overnight and my boss told me that the project is to be completed in 81 days’ time. It’s a huge project costing hundreds of millions of rupees. There were no earthwork, no tunnels and no bridges.

A new railway track had to be laid down and there were tunnels and bridges and I was told that 81 days are left and you have to complete it. I was told by my boss that it is an impossible project but you have to do it. And we completed that.

Interviewer

Only 81 days were given for everything?

I.I.M.S. Rana

Yes, I can recount every day of that project. There were all sorts of problems with the contractors amongst them, with the law and order. One of the Member of Parliament was murdered before I went there. That was a Naxalite area. My employees faced the Naxalites having guns in their hands. So, there were problems that you can’t imagine and almost country’s election was on hold since it was our Ex- Prime Minister’s constituency and all sorts of things. I think I got the reputation in the division that if the things are impossible, give them to Rana. There was Goa project after that so on and so forth. Once again, one of those projects was impossible but we did it. I got the reputation that when the things are impossible there is Rana. Thereafter, I was promoted as General Manager. The Calcutta Metro Railway was in a mess. This was in 1999. I was sent there overnight because metro was burning which means, there was fire and smoke, clashes and disruptions and everything had gone haywire. I was sent there because that technology was old and the spare parts were not available. Things improved within a matter of few months when people started claiming that this is one of the best metros in the world, even better than the metro in London.

Interviewer

Is Assam also in the Eastern Railways?

I.I.M.S. Rana

Yes, it goes up to almost Malda and Farakka barrage. The worst ever floods came while I was the General Manager of Eastern Railway. Therein, without a flutter we did that job. Floods caused total devastation and we commissioned everything within a matter of few weeks. There was very heavy rain resulting in breach of dam and sudden release of waters. This was in the year 2000, worst ever floods and hundreds of kilometres of tracks were washed away.

Interviewer

Which was your biggest administrative challenge and what was most extraordinary about that challenge?

I.I.M.S. Rana

It is very difficult to say which was the most difficult, but the biggest challenge that I face is today, as the chairman of the railway board. My vision or my one point program is to turn around the railways into an efficient enterprise but still remaining a government department. This is the biggest challenge, which I have and I am still going through. Nandiyar project was also challenging. I have been involved with a large number of projects and all the projects that I have handled for the last few years were said to be impossible and so it is very difficult to distinguish which is the most challenging.

Interviewer

Coming back again to your vision now as the Chairman of Indian Railways Board. What is your vision for Indian railways?

I.I.M.S. Rana

My vision is to make Indian Railways more efficient by making the railway board more efficient. The environment in the country has been changing over the years. Expectations and aspirations of people have gone up. Even a single accident causing a few deaths is a national calamity and becomes a national issue. While there are accidents and almost 50,000 people die on road, expectation or the aspirations from the railways is totally different. In the railways, we have 1.55 million employees today and hundreds of thousands of them perform hundreds of operations, which concern safety everyday. Like a driver passes hundreds of signals everyday looked after by points’ men and switchmen, line clearing and all that. And even if one or two of those employees make a mistake we can have accidents. Under such circumstances the railway still runs 15,000 trains throughout the year and we have very few accidents compared to the size of operations and we are further brining the accidents down. Our aim is to turn over such an organization to come up with people’s aspirations and expectations and to make the railways more efficient. In today’s world, when it is extremely difficult to discipline your own son or your own domestic servant, you have to tell him that keep the table like this, fork and knife like this, you explain him hundreds of times and every other day, still he makes a mistake. Whereas, in the Indian railways with hundreds of thousands of employees perform hundreds of operations in a precisely laid down manner and that’s how the railway runs. He will say these words when he takes a line clear, he will do this action like that, the gate man has to stand in this position and keep the flags folded. Everything is so precisely dealt with. When a train runs at night look at the level of responsibility, the trains goes 400 to 500 kilometres in a night. Sometimes, it’s raining or it is passing through the jungles. In such situations our gang man, the lowest paid employee, picks up his bag with his raincoat, a torch and a number plate and every kilometre is patrolled by him. There is one gang men in every single kilometre. While passengers sleep very nicely in the train’s compartment, one doesn’t realize that you have travelled 500 kilometres but 500 people were there taking care of your safety. The man has to whistle and put a light on his number plate and the driver knows that the man is there. If he is not there, the driver is supposed to stop at the next station and give a report that that man is missing. There is a diary with every gang man who exchanges it with the next person and so on and it reaches the station and the station master signs it. Our people go and check next day that yes, this man was there. It is a tremendous system. But the question is how to turn such a vast organization into an efficient enterprise still remaining in the government’s control and rules. This is a tremendous challenge as to how to make this an efficient organization.

Interviewer

Have you specifically spelt out what you want to do for realizing your vision?

I.I.M.S. Rana

I am convinced that if you make the working of the railway board more efficient, then the efficiencies will trickle down. If we can make the human resource more efficient it would be great. We, in the Indian Railways spend almost 50 percent on our human resources. Therefore, if we can increase the efficiency of that resource by motivating, training, solving their problems and make them all customer-focussed, then we can become more efficient. If we can change these attitudes, these concepts right from bottom to the top. To change the concepts, the attitudes and the powers, is a tremendous job.

You asked me how I would go about it. I’ve been asking this question to my superiors earlier for the last four years that why can’t railway board be more efficient? Why can’t the decision be given faster than what it is, why does it take a year and a half to finalize the contract tender, why is the railway board doing this job at the board’s level? I didn’t get the answer as to why can’t we become more efficient. For last four years, I couldn’t get the answer from the highest authority. When I came here as a Member- Engineering, railway board, within few days of my coming, I realized what’s wrong i.e. people don’t have time. The biggest challenge is how to find time because environment has been changing. There are so much of political requirements in the parliamentary committees and the aspirations of the people, the questions & answers, letters and all sorts of things. Therefore, people are busy in fire-fighting. They don’t have time:

1. 1.

   to have a long-term plan;

2. 2.

   to solve the chronic problems;

3. 3.

   solve the immediate problem;

4. 4.

   to talk of the rules and procedures;

5. 5.

   simplifying the rules and procedures;

6. 6.

   removing the level of functioning;

7. 7.

   for delegating; and

8. 8.

   bringing technology in use.

So, these are my agenda points to make the railway board more efficient i.e. making Indian railway more efficient by making the railway board more efficient by all these strategies and methods. How is it possible to find time when 50 percent to 75 percent of time is spent on the external environment? The only way we can find time is:

1. 1.

   to delegate the authority and simplify rules and procedures;

2. 2.

   to build the system on faith;

3. 3.

   to change the paradigm; and

4. 4.

   to change the concept and attitudes.

As for myself I have been able to do all that. I have all the time. The board’s 80 percent time should be used for thinking and talking i.e. brainstorming for the long-term problems, chronic problems, delegation, and technology usage. I am able to find time for myself, 80 percent of my time I am investing in that. So, the next step is how to inculcate it into other parts of the railway board, 6 other board members who have their own thinking. These are all the successful people, they have all come up after such a grinding and they have ideas of their own, views of their own, rigidity and power. So, as a matter of strategy, I had decided first thing is to take the railway minister along because if we are having difference of opinion with the minister then half of the energy is dissipated there. We are on the same wavelengths. Either, he convinces me or I convince him and then we proceed together.

Interviewer

Have you been able to formulate some kind of a strategic plan for what Indian railway should do? Is there a strategic plan in terms of the fact as to what is the importance of technology in railways as Railways is spending so much? What should be the new organizational structure? Should there be a corporatization model. What should be the kind of resources that should be there?

I.I.M.S. Rana

We held a seminar about “Vision 2025” in which we discussed that how should the railways look like in the year 2025 where we summarized a few things and there were brainstorming session and there were papers from each department and each field. For each department or discipline, we have formulated a plan. Even otherwise in the board, every member has got a plan for his discipline as to how should the railway look like in the year 2025. We have one-year agenda, five, ten, 15 and 25 years agenda on different things. There are large numbers of technologies, which are on the anvil. In fact, we started with the technologies as to how would the technologies look like in future. Today, what are the technologies in the world, what is appropriate today in this country, what would be the technology five years’ hence in the world and in India and ten, 15, and 25 years. In fact, there was a World Environment Conference and I was invited there for receiving an award for one of our productions unit, WAP, for best environment factory in the country i.e. WAP Bangalore. His Highness, Mr Dalai Lama, gave the award. That’s how we are proceeding and we have plans specifically, for each department and each discipline. We have taken large number of new initiatives this year. Last few years, Railway had gone into a dump. The reason was basically beyond the control of Railways. It was due to the fifth pay commission with which the cost of the staff went up tremendously and suddenly. Also, the number of pensioners have gone up and we have now two third, that is, 1.5 million regular employees plus 1 million pensioners. The pensioners are going to further increase in the next five years’ time and are going to overtake the working population. We had gone into a very difficult situation few years back financially. Since 2001, we have taken tremendous initiative in a lot of financial matters as to how to overcome this situation. Most important being the participation by the private sector. So, this controversy has been there that, is the railway’s role commercial only or social also. Actually, there are four roles that we are performing:

1. 1.

   the commercial role for transportation;

2. 2.

   the social role;

3. 3.

   the strategic role; and

4. 4.

   the defence role, for example we are implementing some national projects for Kashmir or for the North East development.

There are number of roles. We are not a commercial organization only dealing with the commercial thing. It’s the lifeline of the nation. There has been a debate but nobody can split the roles of the railways in this country from the other requirements of social development, defence-needs, national development like linking Kashmir with the country. We have been able to involve the state governments, thanks to our Minister of Railways, states have also come up with the participation in railways by funding the projects and expansions programmes. So, private participation has helped and private ports have been built.

My message to the staff, when I took over, also talks of my philosophy. I also sent a concept to the stakeholders who include state governments and private sector industries. We are getting funding for the special purpose vehicles that we are forming for certain projects. There are a lot of new initiatives which we have taken. We have drawn a road map or a route map for our future and things are turning along. One of the important aspects that Indian railway is working on is the financial crisis, but we have been able to overcome the downturn and now the future is bright because we are taking a lot of initiatives. Let me give you one example. This is the first time in the Indian railways that we are thinking of responding to the airlines industry’s slash in fare. This is a new face of the Indian railways, which gives a message that we are coming out of the groove, of the paradigm. We have to compete. We have lot of competition and Indian Railways has to take decision and we have to take the decision fast. So, this is how we are today. That is my vision also to convert Indian railways into enterprise that can take decisions, who can take decision fast and who can come out of the groove and the early signs are very healthy.

Interviewer

What are the strengths of the Indian Railways?

I.I.M.S. Rana

Our basic strength is that we are energy efficient and we are environment friendly. We are six times more energy efficient than the road transport. Second strength is that we have tremendous traditions and systems in the railways, which is a great strength and somewhat of a weakness because it is extremely difficult to change such a vast system and organization and to come out of that groove. Third is our organization, our people. Our operations people, down the hierarchy have tremendous potential. These are the three major strengths. Any organization that has strength of technology, the strength of the tradition, strength of the people below them is tremendous.

Interviewer

What do you think are the barriers you are facing towards the realization of your vision?

I.I.M.S. Rana

Our concepts, attitudes, groove, bureaucracies, red-tapism, holding to power, non-delegation, all sorts of things are there. There are lot of barriers and that is why I call it the biggest challenge to start from the concepts and the attitudes and the groove and the power, it is very complex.

Interviewer

Have you drawn out a roadmap for the organizational change you intend to bring about?

I.I.M.S. Rana

One point program, for next one year i.e. to make the railway board’s working efficient by delegating powers, by simplifying rules and procedures and by bringing about better technology.

Interviewer

How are you planning to do it, any specific road map?

I.I.M.S. Rana

It was to get Minister of Railways’ confidence which I said, that we have the same wavelength, same reputation, 100 percent confidence otherwise if you are going in the opposite direction then you are dissipating energy, can’t do anything. I can say that now, it is happening very healthily as teamwork. To implement their visions and ideas rather than forcing mine, that’s like team working. So, that’s the third aspect.

The fourth thing is to make the railway board more efficient by technology, by simplification of rules and procedures. I have been able to convey my ideas and which are now getting reception for the changed concept to convince everybody in the board that we have to change. We have to take decision fast and we have to delegate. That entire framework is made ready in the last three months. In fact, 100 percent confidence of minister, taking the board along, conveying my ideas, is it all about. The framework has been built on which we are proceeding further.

Interviewer

How do you think a railway is planning to respond to the airlines in the fare war?

I.I.M.S. Rana

I would say first, it is still under consideration. If I know correctly, this has never happened before that railway is ready to compete with the airlines or even the oil pipelines; there are a lot of issues there. We are ourselves introducing competition within the railways and with outside parties. Now, we are forming Catering And Tourism Corporation. We have a Railtel Corporation for communication. We have tasted success already, it is just to extend that experiment. Within the Container Corporation also, we are giving it to a private party. So, we are conscious in bringing this corporate look after those business models and a Land Authority is going to be set up. This is one of my agendas to give the fullest support to the new ventures and new ideas and suggestions.

Interviewer

Coming back to the separate companies of corporate entities, this whole concept of increasing corporatization. How do you plan to push that?

I.I.M.S. Rana

All our public sector enterprises are doing well. IRCON (Indian Railway Construction Company) was set up in 1988 and is a very successful experiment. The challenge before the railways was to whether it should remain a government department or go private and now we have formed the Tourism and Catering Corporation, Railtel Corporation and Land Authority.

Interviewer

Is the Land Authority mainly for managing all the land which is there and how to use it better? Will this also become a public sector under the Ministry of Railways?

I.I.M.S. Rana

Yes. It will be called authority rather than corporation. There is slight distinction between that. It will become a Land Development Authority for land utilization and property development.

Interviewer

That is tremendous. There is so much land that railways has.

I.I.M.S. Rana

Yes, so we are creating new sorts of business models wherein the Indian railways is making new corporations which are on the lines of public sector units. So that they could take decisions, delegate power and compete.

Interviewer

How do you react to what happened in Britain where privatization took place and it turned out to be such a disastrous experiment that nationalization is now more or less happening. How do you respond to that in the context to Indian railways?

I.I.M.S. Rana

As I said, that it is not necessary that the model which is applicable to UK or Sweden or in any other country, may be applicable over here. Our circumstances are totally different. It is such a vast nation; it is such a vast system. So, it is not absolutely necessary that the same model will apply wherein the central functioning system with attached public sector unit for each type of business.

Interviewer

Is it a kind of hybrid model wherein the traditional railway model continues alongside the new corporate models for different services?

I.I.M.S. Rana

That’s right. That’s where we are proceeding. I think this total thing is going to be unique experiment. Anything on the Indian railways has to be unique where we manufacture about 2,000 coaches every year. In other countries no such system is required as they don’t need it. So, anything on the Indian railways has to be unique because of the uniqueness of the nation, socio-political system, organization, vastness of the organization with about 1.5 million employees.

Interviewer

What do you think are your strengths as a Chief Executive?

I.I.M.S. Rana

My strengths are quick decision making, implementation, experimentation and boldness. I think the problem of India as a nation is implementation. We can have laws but our problem is that we can’t implement them. We can construct structures, but we can’t maintain that. Even in the Indian railways, the problem is that of implementation. Fortunately or coincidentally, that is my strength. I can implement things. I can take decisions fast. Tell me what is to be done and I will do it. Coincidentally, I have proved by credentials or strengths by implementing projects which were said to be impossible. In fact, recently there was a new project for Fatua Islampur line, which they said, is impossible to complete by 30 June and by 29th June we completed that. There is no such word called postponement in my dictionary.

Interviewer

Whom do you admire as a leader?

I.I.M.S. Rana

That’s a very difficult question. I have never really thought from that consideration. As my bosses are there, I can remember one of them Mr Gopalan who has extended all support and motivation to his subordinates. I can remember a number of people who are within the organization and I admire them.

Interviewer

Any organization you admire or any organization which you think can be a role model, which you have thought of as a model organization in India or worldwide?

I.I.M.S. Rana

I have been admiring Mr E. Sreenadharan who completed both the Delhi Metro and the Konkan railways within budget and ahead of schedule. I appreciate the way he is organizing things, taking decisions and changing the systems. Another organization that I have been admiring is the National Highway Authority of India for the way they are working.

I admire the Japanese, their system and the perfection with which they do things. I have lot of experience of working with them. In 1983, on my way from the airport to the hotel in Japan, I misplaced my eye-glasses in a local bus. Having left the bus I realized that I was working in the bus and they must have been left there. I wondered on how to find as there are hundreds of buses. I went to the reception and asked them for help. He said at what time the bus started and from which gate. Fortunately, I remembered the time and the gate number. After 20 minutes of reporting I got a call saying that my specs have been located. They are lying at the lost property office which was 2 kilometres from where I was. They gave me the name of the person is on duty and the box number. Thousands of people travel in hundreds of buses each day and yet they were able to locate my eyeglasses. It represents their value system. The people there have so much of discipline to work as per there values that they are supposed to pick up lost property and hand it over somewhere which go somewhere and which is computerized to tell you within 15 minutes where one could locate his lost belongings. The way they work with such perfections is very unique. I was amazed with this experience

Interviewer

What do you think are your weaknesses?

I.I.M.S. Rana

I become lose-tempered sometimes or get worked up, I get slightly agitated.

Interviewer

Your positive attitude is remarkable.

I.I.M.S. Rana

Lot of people have been saying that and I accept with all humility. I interact with all staff irrespective of their hierarchical position and with my young officers. I support my young officers. They are the real pillars of the railway and not the members or the additional members, executive director of the railway board. I keep my lines of communication open with all our employees. I can walk in to their rooms and they feel so thrilled, it’s so easy to motivate people.

Interviewer

You were also involved with Calcutta (now Kolkata) metro; please tell us something about that experience.

I.I.M.S. Rana

I had never seen Calcutta metro earlier and my secretary told me that the press is waiting for me. It was the first minute of my taking over that role and was told that since morning there were ten to 20 reporters waiting for me. My secretary advised me not to meet the press saying that, “if you want to meet, do that after a few hours because whatever you will say they will publish negative”. I said well, they have been waiting since morning, if I don’t meet them now, in any case they will write negative. Let me meet them. I met them and they asked me some sharp questions like, “what are your plans for turning it around the metro?” etc. Anyway, I handled them very well for 15 to 20 minutes.

Since people are sure that I am genuine and I am well meaning, whatever decision I take they accept them. I told them genuinely whatever I say; I speak from my heart basically. I told them I am a customer man and I am going to meet the customers and going to see what are their problems. So, this was a positive thing. I proved everybody wrong that Calcutta was so sensitive or so negative and impossible to change. Communication is the key and to care for the customers is one of my main focuses. I met the federations, the unions; there were large number of them. I met the federation and developed a rapport with them. A bengali has a different rapport and a bihari has a different rapport. The style of management has to vary as per the culture.

Interviewer

What do you think as your philosophy of management and your philosophy of life?

I.I.M.S. Rana

My philosophy of life is balance. Balance in everything. Balance also tallies with the nature, the stars and the sun. The nature has a balance. So, balance is my philosophy of life and thereafter.

Interviewer

What do you think is leadership? What would you look for in another leader suppose you have got to look in a younger leader? What are the qualities you will look for in a person?

I.I.M.S. Rana

I would say taking your team along, taking initiative, hard work, having some special projects achievements and the zeal and will to achieve something.

Interviewer

Anything else you would like to tell us?

I.I.M.S. Rana

I have never put a red light in my room. I have never had a confidential and secret desk. People are talking of transparency in our country and of the transparency act. I followed it for more than 30 years.

Guru Prakash PrabhakarInterviewer