labels: indian institute of management, infrastructure - general
Lalu Rail stops by at IIM-A on a lecture tournews
19 September 2006

At a close-door session with around 90 students and faculty of the prestigious IIM Ahmedabad, railway minister Lalu Prasad Yadav (he prefers to call himself just Lalu Prasad) participated in a marathon 3-hour case study discussions on the theme, on "Indian Railways: Leading change and transformation."

Ever since Yadav took over as the railway minister, the Indian Railways (IR) has become the second-largest profit earning public sector unit after oil major Oil and Natural Gas Corporation and Yadav has emerged as one of the top-performing ministers in The Manmohan Singh government.

Yadav also endowed the institute with a Indian Railway (IR) chair, devoted to the study of the systems that have driven IR - among the largest rail networks in the world. The total route kilometres covered by all the IR trains every day has been estimated at seven times the distance from the earth to the moon.

At the end of it all, his wit, charm and humour, combined with out of the box strategic thinking had him enjoy high ratings from the students who take globally reputed faculty in their stride. Yadav not only fascinated his audience with his personal charisma but also facts and figures on IR and the turnaround strategy of one of the most complex rail networks in the world that manages to utilise efficiently some of the oldest fixed assets.

Recently, a study conducted by senior IIM-A professor G Raghuram on the turnaround of IR was included in the curriculum for post-graduate programme in management for executives (PGPX). Yadav, however, said the turnaround of Railways had more to do with common sense than any miracle.

The turnaround study was sponsored by the ministry through the Railway Staff College, Vadodara and was conducted by Raghuram.

Incidentally, Raghuram as part of the Rakesh Mohan Committee had written-off IR as a white elephant and forecast total financial bankruptcy by 2015 under the burden of a Rs6,100-crore debt burden.

IR closed FY 2005-06 with an income of Rs13,612 crore and a target of Rs20,000 crore in the current financial year.

The railway minister has announced a Rs100,000-crore modernisation plan of railway infrastructure, including signals, track and rolling stock in the next five years.

Yadav also explained how IR would set up world-class stations, clean malls by leasing IR premises to private invetors and good amenities for the passengers on the railway station premises. He is not enamoured of the west and recently ruled out large-scale replication of tube-rails or mono-rails in India saying these involved huge investments and government subsidies.

Yadav has spearheaded initiatives like increasing the wagon-load factor, which alone generated Rs7,200 crore in additional revenue. Next on his agenda are freight corridors with private sector participation. The freight corridor would facilitate movement of double-stake container wagons with 25 to 30-tonne axle load. This would increase the speed of trains by two to three times.

He has also planned privatising the parcel booking service at stations, which accounts for phenomenal revenue leaks; and the introduction of open bidding of on-board catering contracts on trains, the rates for several of which had remained unchanged for decades.

Yadav also visualises fresh farm produce being available direct from the farmer to the consumer on 7,500 railway platforms across the country. If the initiative takes-off, it would cut out middlemen (who also double-up as local money lenders) and ensure more remunerative prices to farmers and cheaper produce to consumers.

Yadav also respects his ministry's bureaucrats. Some months ago IIM dons had suggested that he empanel some of them as an expert think-tank to infuse fresh ideas to IR, Yadav is reported to have brushed them-off saying IR had sufficient internal talent available.

Yadav is convinced traffic volume will rise significantly as the economy booms, yielding room for further reforms. He also feels that the Railways will be able to generate revenue to help improve safety, open up container train wagons to private players and air-conditioned "garib raths" with low fares.

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Lalu Rail stops by at IIM-A on a lecture tour