Highlights of Bibek Debroy Committee

Interim Report for Mobilization of Resources for Major Railway Projects and Restructuring of Railway Ministry and Railway Board

Compiled by K.V.RAMESH, Senior JGS IRTSA

1. Implementation should not be left to the existing directorates of Railway Board. Implementation ownership of this report should vest in the Minister of Railways alone, with an appropriate reporting mechanism to the PMO.

2. Various recommendations should be implemented as a package rather than by a process of ‘pick and choose’.

3. If necessary, a body of independent outside experts should also be set up to guide and help in the implementation exercise.

4. IR needs to adopt a commercial accrual-based double entry accounting system to determine the precise extent of subsidization.

5. National projects and projects on cost-sharing basis should be cleaner bearing of the subsidy burden between the Union government and State governments on the one side and IR on the other, covering not only capital investments, but also operating losses.

6. Any increase in passenger fares should be accompanied by better passenger services and amenities.

7. A Railway Infrastructure Company should be created as a government SPV that owns the railway infrastructure, delinked from IR.

8. Provision for open access for any new operator to enter the market for operating trains with nondiscriminatory access to the railway infrastructure and a level playing field.

9. Amendment in the Indian Railways Act to allow the levy of tariffs by private operators without administered tariff-determination.

10. Suburban services should be separated and run as JVs with State and/or local governments, with tariff determination by State and/or local governments.

11. Split the roles of policy-making, regulation, and operations. The Ministry will only be responsible for policy for the Railway sector and Parliamentary accountability and will give autonomy to the IR.

12. Ministry of Railways to determine the policy which should be based on ensuring what is in the best interests of the country as a whole and for the Railway sector.

13. Set up a statutory Railway Regulatory Authority of India (RRAI) with an independent budget, so that it is truly independent of the Ministry of Railways.

14. RRAI to have the powers and objectives of economic regulation, including, wherever necessary, tariff regulation; safety regulation; fair access regulation, including access to railway infrastructure for private operators; service standard regulation; licensing and enhancing competition; and setting technical standards.

15. The Commissioner of Railway Safety needs to be integrated with RRAI.

16. Bifurcation of the dual role played by RDSO. Setting of standards should come under the ambit of the RRAI, the technology role for IR can remain with IR. Railway Research Centers be set up in selected universities.

17. Appellate Tribunal to hear appeals against the orders of RRAI and further appeals against the orders of the Appellate Tribunal can be directed to the Supreme Court.

18. Private entry into running both freight and passenger trains in competition with IR should be allowed.

19. Private participation to be encouraged in non-core activities like production and construction.

20. Two independent organizations in IR: one, responsible for the track and infrastructure and another that will operate trains.

21. IR should distance itself from non-core activities, such as running a police force, schools, hospitals and production and construction units.

22. Private sector participation can be implemented in the form of Service Contracts, Management Contracts, leasing to the private sector, leasing from the private sector, concessions, joint ventures and private ownership.

23. Delink of RPF from the IR system. GM of the zone should be free to use private security agencies or even the RPF.

24. 50% contribution by IR to the GRP is phased out over a period of time.

25. Immediate integration of the existing Railway schools into the Kendriya Vidyalaya Sangathana set-up.

26. Education of children of Railway employees shall be subsidized in alternative schools, including private schools.

27. IRMS role restricted to attending Railway accidents and similar incidents; emergency medical treatment for sick passengers; running medical first-aid posts for IR factories under the Factories Act; certification of dead bodies; and certification of perishable goods.

28. Activities to be outsourced to recognized and empanelled private practitioners
a. pre-employment medical examination for prospective employees
b. periodical medical examination for employees
c. medical boards and other medical certification for employees
d. safe water supply at Railway stations
e. safe food supply at Railway stations

29. Possibility of integrating the 125 railway and hospitals into the CGHS framework should be examined.

30. Subsidized health-care should be extended to Railway employees in more and more private hospitals treatment for existing Railway employees is cashless and is not on reimbursable basis. It also covers not just in-patient services, but also OPD treatment, including access to medicines.

31. Introduction of an insurance surcharge on tickets to cover travel-related emergencies, including Railway accidents and will facilitate the use of private hospitals and doctors and gradually reduce the need for passengers to depend on IR doctors.

32. All these existing production units should be placed under a government SPV known as the Indian Railway Manufacturing Company (IRMC) under the administrative control of the Ministry of Railways. No privatization need be contemplated.
a. All the perks benefits of the existing employees must be protected in the transition even if a one- time exemption is to be sought for the same.
b. Private entry in almost all upcomimg Production Units.
c. Better incentive structure for new employees. Incentive system works best when it incentivizes individual-based productivity linked to a better final output. A group incentive scheme can be worked out at the production unit level.
d. Additionally, the incentives can factor in indicators based on the financial performance of the production unit also.
e. The pay and other benefits of the existing employees must be protected under the new system.

33. Zonal construction organizations under the umbrella of one or more PSUs, like RVNL, IRCON etc.

34. Coordination committee has to be created for issues related to station development such as changes in land use and municipal clearances, and this co-ordination committee meets on a fixed day of every week.

35. Streamline the present system for cleaning (stations, tracks and trains). Contracts should be longer term and there should be decentralization and streamlining of responsibility.

36. More role of the PSUs such as RITES, IRCON, RCIL, IRCTC and RVNL for expanding IR’s capacity, in terms of both rolling stock and infrastructure instead of departmental execution.

37. An ex-cadre post of a Chief Technology Officer (CTO) needs to be created and all IT initiatives should be integrated and brought under this umbrella. Provision of adequate fund.

38. There are too many Zones and Divisions and thus a rationalization exercise is required.

39. Kolkata Metro should not be treated as either a Zone or as a part of IR.

40. Enhanced powers to DRMs in respect of tenders connected with works, stores procurement, service or even revenue-earning commercial tenders.
a. Monetary ceiling is set on the financial powers of DRMs be inflation-indexed, so that the monetary value automatically increases over time.
b. If the earnings target is achieved, there should be a provision for re-appropriation across the budgetary or Plan heads.
c. Some earnings by the Division should be retained at the level of the Division, to be spent on specific purposes.
d. DRMs should have powers to sanction new posts that are financially neutral.
e. Finance must completely be under the DRM.
f. ADRMs should be an explicit part of the administrative chain.

41. All A1 and A type stations should be manned by gazetted officers as station manager to enable Group A services to have mandatory exposure to working at the grass-roots level in stations earlier in their careers, perhaps for 2 years.

42. The head of the Zone / PU (GM) must be fully empowered to take all necessary decisions without reference to Railway Board within the framework of policies.

43. Zonal Railways should have full powers for expenditure; re-appropriation and sanctions, subject to it meeting its proportionate earning target.

44. Railway Board should become like a corporate board for IR. The Chairman of the Railway Board should thus be like a CEO.

45. An individual should be appointed as Chairman or Member or GM only if he/she possesses at least 3 years of service left.

46. Railway Board Secretariat Services (RBSS) and the Railway Board Clerical Services (RBCS) be merged with the Central Secretarial Services.

47. Financial statements of IR need to be re-drawn and restructure existing accounting system.

48. Bringing all assets of IR to the book, not only in terms of enumeration but also their valuation.

49. Immediate corrective steps should be taken to rationalize expenditure on salaries and wages of existing employees by right sizing IR through rationalization of manpower.

50. Shift focus to business/customer units like freight business, passenger business, suburban business, parcel business etc.

51. Reducing the hierarchical decision making levels, coupled with simplification of rules and policies, with greater autonomy.

52. Delegation of powers should be made to the Zones/field units.

53. Merge the existing eight organized Group ‘A’ services into two services i.e. the Indian Railway Technical Service (IRTechS) and the Indian Railway Logistics Service (IRLogS).

54. Recruitment of a few officers with degrees in Mechanical Engineering through the Special Class Railway Apprentices route should be discontinued.

55. If Railway Universities formed, there will be a pool of specialists in Railway engineering, recruitment to IRTechS after class 12th. Once that Railway University channel is opened up, the UPSC route should not continue.

56. There will be no change in the manner of promotion of Group ‘C’ officials to Group ‘B’ posts in IR.

57. Indian Railways General Management Service (IRGMS) which will be manned by officers selected from suitable/eligible officers belonging to IRTechS and IRLogS.

58. Lateral movement of officers, both from outside to IR and from IR to outside both in technical & non-technical departments.

59. Rationalization in the number of employees in by:
a. Carrying out an exhaustive independent work study and laying down yardsticks for different activities;
b. Simplifying processes, streamlining systems, rationalizing and discontinuing obsolete and low value adding activities;
c. Reducing number of peons, khalasis and other such categories through rightsizing and outsourcing;
d. Discounting and eliminating a number of obsolete Group ‘D’ categories that are no longer relevant (box porter etc.); and
e. Taking steps to increase the output of such staff at the relatively lower levels whose functions are linked to safety (e.g. gangmen, trolley-men etc through multi-tasking, adoption of better technology, retraining and efficiency enhancing measures etc.)

60. Norms for compassionate grounds appointments followed elsewhere in the Government, as upheld by the apex court.

61. Review the safety-related retirement scheme (SRRS) for Drivers and Gangmen.

62. New suburban lines should be undertaken as joint ventures with State governments.

63. Subsidies on passenger fares to be reimbursed directly into bank accounts, by linking Aadhaar number for those who are targeted BPL.

64. Various concessions given to passengers relate to other Ministries and the cost of the subsidy could be borne by the concerned Ministry.

65. The freight rates should be left to market principles and no freight-related social cost should be imposed on IR.

66. Gross Budgetary Support (GSB) net of dividend payable.

67. Financial assistance from the state governments to IR for uneconomic branch lines and suburban passenger services.

68. Focused investment on remunerative projects to enable generation of adequate internal resources for financing replacements of assets.

69. GOI to provide funding for projects that are commercially viable to IR not in form of grants, but as loan guarantees.

70. Non-fungible, non-lapsable safety fund, funded as a safety surcharge, with matching grant budgetary support.

71. Separate Railway budget to be phased out progressively and merged with the General Budget.

72. All projects initiated before 2000 be re-evaluated and sanctioned costs should be examined for discontinuance.

73. Freight tariffs should not be so high as to drive away the customer to a competing mode of transport.

74. Introduce and proliferate higher pay load to tare weight ratio wagons;

75. Improve average speed of goods train, by use of longer trains and loco-trawl;

76. Progressively introduce time tabling of freight trains.

77. On-board catering through large food chains and local restaurants on the payment of a modest license fee.

78. Leasing of parcel vans and brake vans in trains through auction of carrying capacity/ Private parcel trains is recommended.

79. Introducing Millennium Parcel Express on fixed time-tabled path.

80. Dedicated parcel terminals to reduce interference with passenger traffic.

81. Integration of OWS, WIS/LWIS, CTOs, PFTOs into a single comprehensive policy

82. Concession the commercial operations of Rajdhani/Shatabdi trains to private parties.

83. Tap other extra budgetary sources like insurance companies and pension funds.

84. Identified immovable properties can be transferred to an SPV, which can be structured as a REIT (Real Estate Investment Trust), wholly owned by IR or in conjunction with domestic financial institutions.

85. A long-term bullet bond or a zero-coupon bond, whose repayment (including interest and principal) is at maturity, can be issued to meet a part of the current pension obligations.

86. For raising resources for investments, an Investment Advisory Committee may be set up.