Bankruptcy to billions: Turnaround saga of Indian RailwaysFebruary 21st, 2009 - 9:03 pm ICT by IANS
New Delhi, Feb 21 (IANS) The turnaround saga of the world’s second largest railroad network, scripted by an unlikely candidate, Railway Minister Lalu Prasad, first caught the attention of the best-known management schools. This amazing story of the 156-year-old Indian Railways over a short span of just five years has now been captured in a book.
The book, titled “Bankruptcy to Billions”, takes the reader through the short but intriguing journey of how the organisation that once defaulted on dividend payments, turned in a cash surplus of $18 billion by 2008 - without any hike in fares, freight rates or retrenchments.
As Lalu Prasad looked on proudly, President Pratibha Patil was presented this 228-page book, published by Oxford University Press, by its authors Sudhir Kumar, officer on special duty with Indian Railways, and Shagun Mehrotra of Columbia University.
“This book on the transformation of the Indian Railways describes how progress is possible while benefiting, rather than burdening, the poor,” Prime Minister Manmohan Singh says in his foreword.
The Indian Railways runs some 13,000 trains each day, including passenger trains, over a network of 63,000 km, to ferry some 17 million passengers and two million tonnes of cargo each day between 7,000 stations.
Kumar, a member of the Indian Administrative Service (IAS), recalled how the numbers spoke for themselves, resulting in the transformation that started from near bankruptcy and deterioration of operating ratio to 98 percent in 2001.
“The same railways generated a cash surplus of over $6 billion in 2007-08 and on the benchmark of net profit it would have joined, if we were a corporation and not a government department, the elite group of Fortune 500 companies,” Kumar says.
He also lists some of the strategies that led to the turnaround, that may sound basic but played an important role: These include faster, heavier, longer trains; free upgrades for passengers; e-ticketing; and yield per trans as opposed to rate per passenger or tonne.