Financial Daily from THE HINDU group of publications
Wednesday, Nov 23, 2005
Rlys may take some lessons from its Chinese counterpart
New Delhi , Nov. 22
INDIAN Railways may take some lessons from its Chinese counterpart in certain areas that include reduction of unit cost of transport, improving asset reliability through higher maintenance standards, separation of non-core activities and increased use of information technology in railway management, according to a delegation of Railway officials that visited China recently.
The visit was arranged as part of the World Bank-sponsored exchanges between the two countries to study railway development strategies.
Another area of learning is the way the Chinese Railways has ensured that its subsidiaries get to bid for projects that are funded by multilateral agencies such as the World Bank.
"By transferring major activities like railway engineering, civil construction, telecom and signal construction and rolling stock manufacture to the State large-scale working committee, the Chinese Railways has ensured that its units in these areas are able to bid for projects of the China Railways that were funded by the World Bank," said Ms Geeta Thoopal, Additional Member (Finance), Ministry of Railways, while speaking at a seminar organised by the World Bank hereon Monday.
"We have suggested to the Railway Board that this could be a learning for the Indian Railways as well," she said. In certain Indian Railway projects funded by multilateral agencies, the construction arm of Railways, Ircon, is not allowed to bid (as per the rules of these multilateral agencies) as it shares the same parent Ministry.
The Chinese Railways has also learnt from its Indian counterpart in areas such as containerised operations.
"The Chinese officials told us that they had studied the Concor model and adopted it while forming a container services company in 2004," she said.
She said the Indian Railways is already preparing a long-term plan document for 2005-2020.
That includes hiving off non-core activities and increased use of IT.
Plan size for next fiscal
A senior Railway Ministry official said that the Indian Railways expected the Plan size during next fiscal to be about Rs 18,419 crore 20 per cent higher than that of the current fiscal. For 2005-06, the Plan size was Rs 15,349 crore.
Thus, the Railways' Plan size is expected to be up by another Rs 3,069.8 crore for 2006-07, as per the early estimates.
"Roughly half of this could be met by internal accruals whereas the other half could be funded by the Government," said the official.
However, the Planning Commission is yet to get back on the issue.
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