Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

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Railway Reform: Toolkit for Improving Rail Sector Performance Case Study: Indian Railways 2 Indian Railways 2.1 Governance and Organization of Railways The MOR (IRB) has formal responsibility for governance of the 16 ZRs, which therefore have no separate or independent Boards of Directors, but are subject to independent oversight from CCRS on safety matters. Employees of Indian railways are public servants or deemed public servants. The 16 ZRs have general managers reporting to the MOR, and typically, each ZR headquarters has around 15 function-based departments—accounts, administration, commercial, conversion, electrical, engineering, 159 IT, mechanical, medical, operating, personnel, press, signaling and telecommunications, safety, security, stores, and vigilance. Department Heads report directly to General Managers and have a functional reporting line to the appropriate functional MOR (IRB) Board Members. The 16 ZRs are sub-divided into 67 divisions, each with divisional headquarters. The divisions can include workshop and construction divisions but most are operating divisions that comprise the primary production units of IR; each has its own functional management structure mirroring the organization of ZR headquarters. Accounts maintained by each division (operating division or workshop) are consolidated at ZR level, and further consolidated at MOR (IRB), including accounts of production units and other activity units directly under the MOR (IRB). Since the 1989 Railway Law was introduced, the traditional organization and governance of Indian Railways has remained unchanged. Nevertheless, the MOR (IRB) policies have established corporatized entities to manage selected railway business segments outside the full bureaucratic and public service framework of ZRs. These entities include the following organizations, among others. • IRCON International Ltd - a transport infrastructure construction company (formerly Indian Railway Construction Company) 159 The engineering department is responsible for track and other civil works. The World Bank Page 354
Railway Reform: Toolkit for Improving Rail Sector Performance Case Study: Indian Railways • Container Corporation of India Ltd (CONCOR) - operates a network of about 60 container terminals, offering rail and road container services between the hinterland and ports, and between major metropolitan areas (but IR retains responsibility for providing locomotives, train crews and train dispatching) • Indian Railways Finance Corporation (IRFC) - a dedicated financing arm of the MOR • Rail Vikas Nigam Limited (RVNL) - created to develop projects, mobilize financial resources, and implement projects to strengthen so-called golden quadrilateral lines (the four main long-distance transport corridors in India) and connections to ports • Rail Land Development Authority (RLDA) - statutory authority for generating revenue by developing vacant railway land for commercial use • Dedicated Freight Corridors Corporation of India Ltd (DFCCIL) - established to procure and operate selected new dedicated freight lines, now wholly owned by MOR (IRB) • RITES - a domestic and international railway and transport consulting company 2.2 Network Indian Railways’ network is just over 64,000 route-kms (Figure 3). 160 The network has been progressively duplicated and electrified. Over 15,000 route-kms have been standardized to the broad gauge (1676 mm). 2.3 Railway Transport Markets In terms of traffic task, IR is the world’s second largest passenger railway, after China, and fourth largest freight railway after the U.S.A., China, and Russia. India’s large and rapidly expanding population provided steady but relatively slow growth in railway passenger traffic during the last decades of the twentieth century as other modes gained market share. During the last decade, accelerated economic development increased purchasing power and, in combination with politically imposed low fares, boosted railway passenger traffic growth by 70 per- 160 In March 2009, IR had 64,015 route-km of which 52,808 were broad gauge (1676mm), 8,473 km meter gauge (1000 mm) and 2,734 narrow gauge (762 and 610 mm). Broad gauge generated 99.9 percent of freight output (ntkm) and 97.9 percent of passenger output (pkm). The World Bank Page 355
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