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Vivian Fernandes
Friday , December 07, 2012 at 16 : 04

Lessons for the Railways from the vote on FDI in retail


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It is my belief that no ministry is light-weight and that it is the personality of the minister that lends its gravitas or importance. Kapil Sibal showed that a man with ideas could lift even a low profile department like science and technology. Jaipal Reddy will ensure that every ministry he heads is as stodgy as his English. Governments are elected to perform, not to lead the nation in prayer. By delivering a victory to the government on the issue of foreign direct investment in retailing in the Lok Sabha and a stunning one in the Rajya Sabha, parliamentary affairs minister Kamal Nath has demonstrated that more than 'gentlemen,' governments need movers and shakers. Imagine the convulsions this government would have been racked with if Pawan Kumar Bansal and was in place of Nath to manufacture the numbers.

Bansal need not feel disheartened. He has opportunity to demonstrate non-performance in a key infrastructure ministry.

When the Trinamool Congress left the ruling coalition, the Congress secured the Railways - after 17 years. A procession of ministers in between, with the exception of Nitish Kumar and Lalu Prasad, ran it aground. C P Joshi was given additional charge on 23 September. Reform-minded officials say he moved in with purpose and determination. He proposed a tariff regulator, not as an executive, recommendatory body, but one with statutory powers. He favoured private players, not only in the construction of rail lines, but also in train operation. And when that happened, the Railways could lend its safety staff or train those of the private operators for a fee, he said. As minister also of highways, he gave fast clearances for road over/under bridges. He also dusted up the private investment proposals for electric and diesel engine factories at Madhepura and Marhowra, which Cabinet had first approved in February 2009.

On one pretext or the other officials had stalled the projects despite monthly bleats since June 2011 for expeditious clearance by the office of the lamb-like Prime Minister. Railway officials had trashed Rakesh Mohan committee's 2000 report on railway restructuring. Why should they allow private wannabees a toe in the door and whittle the Railway monopoly never mind if the Railway-run engine factories at Varanasi and Chittaranjan were (documented by the CAG as) hugely inefficient. Joshi also had four rounds of meetings with Montek Singh Ahluwalia, the Deputy Chair of the Planning Commission, who assured support of the Finance Minister.

What did Joshi get for his dynamism? A divestiture of the additional charge and a contraction of responsibilities. There would be no quibble, if Bansal had proved to be a better alternative. It is more than a month, but apart from occasionally clucking like a perplexed hen from his coop about raising fares, there is no sign of new energy. More than FDI in retailing, an invigorated Railways can give the economy an immediate boost, with socially-beneficial multiplier effects. The choice of the current railway minister does not so much indict Bansal, as calls into question the Prime Minister's judgement and his expectations for the nation.

Now just see what another Brics nation has done. According to Summit TV, the Passenger Rail Agency of South Africa (Prasa) has just given a consortium led by the French Alstom a $5.8 billion contract to design, manufacture and supply 3,600 modern coaches over a period of 40 years. South Africa's last investment in the railways was 33 years ago. As a result, it has lost a lot of skills and capacity. The coaches were chosen for energy efficiency and low life-cycle costs. The coaches will be produced locally; two-third of the components will be indigenous. The deal is expected to create 8,000 jobs directly and 23,000 indirectly over a 10-year period. The funding is mostly by the government. The railway agency is also investing in signaling, stations and depots. It expects South Africans to once again discover the charm of comfort travel by public transport.

In India there is no such hope on the horizon. Those of us who cannot afford exorbitant air fares can forego long-distance travel, unless one books a couple of months in advance or has a contact in the Railway Ministry.


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More about Vivian Fernandes

Vivian Fernandes is a senior journalist with nearly 30 years of practice, 19 of them in television, all of which he spent at TV18. Vivian’s last assignment was as executive editor of a book on India and China written by the founder of the Network 18 group, Mr Raghav Bahl. He has been an observer of Indian business and politics, and had reported on economic policy making as reporter, chief of Delhi bureau of correspondents and economic policy editor. Vivian has traveled abroad with Prime Ministers Narasimha Rao, Atal Behari Vajpayee and Manmohan Singh. He was also reported on the World Trade Organization’s trade talks from Cancun, Hong Kong and Geneva. He continues his association with the Network18 group, but not as an employee.
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