Railway Development Authority RDA

GOI approved it

Why we need independent regulator

Losses in passenger segment mounted from 6K crore in 2004-05 to 30K crore in 2015-16 primarily due to sharp increase in input costs and no commensurate increase in fares over the same period
Rakesh Mohan expert group (2001) , National Transport Development Policy Committee (NTDPC) (2014), Bibek Debroy Committee (2015) recommended.

Railway Development Authority Composition

One Chairman and three members with a fixed term of five years
The Central government will appoint the chairman and members by choosing from a panel of names recommended by the search and selection committee chaired by cabinet secretary.
Allowed to engage experts from various fields
Independence is ensured through separate budget, appointment and removal process

Functions

Recommending passenger fares, setting performance standards for rail operations and creating level playing policy for private sector participation.

The present fare structure is distorted in the Railways network. The passenger fares are subsidized by goods fares which has led to the freight traffic moving away to the road sector

It only recommends to the Railway Ministry
It will collect, analyze and disseminate information and statistics concerning the rail sector
RDA to define standards of performance and efficiency
Suggesting measures for human resource development to achieve any of its stated objectives.

Pros:

Independent regulator
Enhance transparency and accountability
Improves Investors' confidence - which is the most challenging as they were discouraged all these years due to Railways monopolistic framework

Bibek-Debroy committee - Committee for mobilization of resources for major railway projects and restructuring of Railway Ministry and Railway Board

Constituted by Railway Board in 2014 September
To prepare blue print for reforming Indian Railways

Establishment of Independent Regulator RRAI

Recommends setting up an overarching Railway Regulatory Authority of India (RRAI) as an independent regulatory body
Railway Board should continue only as an entity for the Indian Railways (PSU)
will be a statutory body, with an independent budget and independent of the Ministry
it will monitor whether the tariff is market determined and competitive.

Restructuring of railways

As of now,

policy making,
the regulatory function, and
operations

are all vested within the same organisation, that is, the Ministry of Railways

Three roles must be separated from each other

Encourage private participation

Railways’ monopo discourages private sector entry into the market
Schemes for private sector participation are not prepared with the involvement of stakeholders and the risk lies mostly with the private parties.

Financing Issues a challenge - because

Investment is made in projects that do not have traffic and hence do not generate revenue,
delays in projects results in cost escalation which ma kes it difficult to recover costs
the unbalanced mix of passenger and freight traffic does not help generate revenue. Passenger tariffs are subsidized by the revenues from freight traffic
Railways has also been mostly financed through internal resources and budgetary support, and not through external resources.

Restructuring of zones

Need to restructure on a specific strategy

Focus on core activities

Railways also engages in peripheral activities such as running schools, hospitals and a police force.
Non-core activities can be outsourced to private entities.

Accounting reforms

Current accounting system does not provide details of the cost of various activities and services

Don’t know whether the cost to run a train on a particular route is viable or not
neither tracks assets nor assesses liabilities
Where to introduction of new trains and scheduling of stops

Committee recommends switching to a commercial accrual-based double entry accounting system.

will clearly distinguish between revenue and capital expenditures
present a complete picture of debt and other liabilities

Others

Joint Venture with State governments
Investment Advisory Committee may be set up, consisting of experts, investment bankers and representatives of SEBI, RBI, IDFC and other institutions for raising resources for investment

Sam Pitroda committee - Modernization of Indian Railways

Ministry of Railways had appointed an Expert Group on the Modernization of Indian Railways under the chairmanship of Mr. Sam Pitroda
Report in 2012
Envisages a funding of Rs 5.6L crore over the next ten years.
Organization- Re-organize the Railway Board along business disciplines

Chairman should serve as the Chief Executive Officer
Members should be responsible for disciplines such as: − Safety − Business devel ent/ commercial − Technology/ ICT and signaling − Freight − Pas r Services − Infrastructure − Finance − HR − Public Private Partn
Key Account Directors for commodity wise coal, iron or e, steel, food grain, fertilizer and for suburban, long distance passenger etc
Empower Zonal Railways.
Revamp accounting systems
Review the existing PPP policy framework to attract better investments.

Human Resources

Computerized Human Resource Management System
Rationalize and consolidate multiple services and cadres, lateral recruitment from market
system of reward for collective performance

Indigenous R&D

Establish Indian Institute of Railway Research with Centers of Excellence
Develop indigenous capabilities to be a global leader in state-of-the-art railway technologies

Information and Communication Technology

Real Time Information Systems (RTIS) , Radio frequency Identification (RFID) tracking system for wagons, coaches and locomotives to enhance wagon management and real time monitoring,
Computerize Railway files and expedite decision making.

Dedicated Freight Corridors (DFCs)

Construct Eastern and Western DFCs in the next 5 years.
Construct North-South, East-West, East-Coast and Southern DFCs in the next 10 years.
Upgrade feeder routes to DFCs

High Speed Passenger Train Corridor
Signaling

GSM-based mobile train control communication systems on A, B and C routes
high speed LHB coaches

Track and Bridges

Eliminate level crossings and provide fencing alongside tracks.
Tracks should be upgraded to carry heavier freight trains and achieve higher speeds.

Anil Kakodkar High Level Safety Review Committee

The Ministry of Railways had appointed a High Level Safety Review Committee under the chairmanship of Dr. Anil Kakodkar to review the safety of the Indian Railways and recommend improvements.

Its recommendations are:

Infrastructure is severely strained. All safety margins have been squeezed. This has led to a neglect of infrastructure maintenance.
There is need for an independent mechanism for safety regulation. The Committee recommends the creation of a statutory Railway Safety Authority with enough powers to have a safety oversight on the operational mode of Railways.
The Research Design and Standards Organization (RDSO), the apex technical wing of the Railways, is highly constrained. This has hampered the ability of the system to internalize emerging technologies. The Committee recommends restructuring of RDSO for greater empowerment.
It also recommends that a Railway Research and Development Council (RRDC) be set up directly under the government.
Adoption of an for the entire trunk route length of 19,000 km within 5 years. This is estimated to cost Rs 20,000 crore.
All Level Crossings (both manned and unmanned) should be eliminated over five years. An estimated expenditure of Rs 50,000 crore will be required for achieving this target.
A switch over from the ICF design coaches to the much safer LHB design coaches. This is likely to cost Rs 10,000 crore over the next five years.
recommends a total financial investment of Rs 1,00,000 crore over a five year period.