Railways ripe for restructuring

Railways ripe for restructuring

Railway board structure is dysfunctional and ineffective. It is designed along specialisation and to reinforce silos.

Minister for railways D Sadananda Gowda’s announcement regarding restructuring of the railway board is appreciable. The railway board determines how the Indian Railways will be run. The verticals which function at the board level run through the entire organisation.

If there is a member electrical at the board level, it runs down right up to last station. Conversely, if there is a signal engineer at operational level, there is a member signal at the board level. It is a top heavy board and the structure ensures that there is no service or specialisation unmanned at the board level.

The structure as it exists today is dysfunctional and ineffective. It is designed along specialisation and to reinforce silos. The issue is even if these are staff functions, these verticals run through the entire organisation like parallel tracks.

The expectation that after certain stage officers cease to be mechanical or electrical and turn to be leaders and strategists is belied. They remain as mechanical and electrical till retirement. What IR needs at the board level are heads of operations, engineering, workshops, cargo, passengers, marketing, finance, etc. Alas, it is not possible now because they were recruited by the UPSC for particular slots and not as leaders.

The  officers to railways are recruited through civil services exam and engineering services exam. They try to maintain this difference right up to the retirement. They come from various academic backgrounds and which does not make them to be specialists. The UPSC levels them all.

A candidate with history background can get into accounts services and one with engineering background can get into personnel or traffic service. Of course, only engineers can get into engineering service. They pick up relevant skills through training and through experience. But, if one looks at general manager level they can come from any service. The wide ranging qualifications and background, and subsequent postings practically demolishes the sacrosanct demarcation of specializations.  

Broad-based training

The engineering services can be easily merged and the training should be broad-based. The postings can be rotated so that they get exposure to mechanical, electrical and learn to see IR as one entity rather than multiple entities. If one asks Sreedharan what his strength is he will say it is his leadership and project management skills.

One of the key success factors of project management in Delhi Metro is single consolidated tendering process and not multiple tendering. IR goes for multiple tendering for civil, electrical, signal, etc. because these departments are there. That is how dysfunctionality and inefficiency get built into the system.

At the divisional regional manager and general manager levels they all play the role of general management. That too without proper training.  After being DRM and GM, once they go to the board they again become specialists. At the board level, it should be along broad strategic lines and function like the corporate board taking up the governance and policy issues rather than operational roles. The board also should have outside specialists to look into legal, management and technology issues.

The number of board members can be more but the railways board secretariat should be downsized. The operational head should be a general manager with sufficient powers. The GM today plays at the best a supervisory role. He will be like the head of a subsidiary with separate balance sheet to be merged at the board level. The zone can be treated as a subsidiary with GM as the CEO of it. 

Another important restructuring will be opening up of subsidiaries. Just as there are subsidiaries like IRCTC, Container Corporations, IR can treat each zone as a subsidiary with its own profitability statement. These can be even be treated notionally as subsidiaries. The workshops can be clubbed under a subsidiary just as ICF.

At present, the workshops are managed inefficiently. They should be made to compete for maintenance and profitability. The board allots maintenance works to these workshops and there is no monitoring or competition to be efficient. These corporations will create more top management jobs that can identify inefficient zones and operations, and it is easy to intervene effectively.

Unfortunately, at present the organisation is so designed and aggregated to hide and camouflage inefficiencies. The tax payers, passengers, and ultimately the citizens pay for the dysfunctional and inefficient railways system. The system is designed from the perspective of the officers than from the perspective of the organisation or clientele. This has gone too far and needs to reversed immediately.

(The writer is with the IIM, Bangalore)