The railway minister may feel that he can stay on the beaten track because, by the conventional indicators, the railways have turned in a satisfactory year.
They are likely to meet their targets for both freight and passenger traffic -- not difficult when the tempo of economic activity has picked up.
Nitish Kumar also expects to take credit for a marginal improvement in what is called the operating ratio, indicating a better balance between revenue and costs. He will thus have one little inconvenience left to tackle, the string of accidents.
And this he will do in the best possible way of obfuscating and postponing effective action -- publish a white paper. The railways earned accolades several years ago by publishing a white paper that made all the noises expected of a forward-looking department in the age of liberalisation.
That nothing came of it will not deter Mr Kumar from issuing another white paper.
'Business as usual' will not do because it means trying to make finances respectable by an across the board rise in fares and freight rates. The reports that have been published say that this is what is likely in the coming Budget as well.
A rise in passenger fares is of course called for, but it is doubtful if the fare system will be restructured, as required. Long distance travellers should not subsidise short distance travellers, and the gap between upper and lower class fares is too great, with the airlines now offering fares that compete with the railways in the premium classes.
So an incremental raising of fares, without addressing these structural problems, will not address the issue.
More serious, however, is the likely decision to raise freight rates -- at a time when road transport is getting faster and more efficient, and therefore more competitive.
The likely freight rate rise is justified by citing cost escalation, whereas in industry after industry competitiveness is being pursued by absorbing rises in input costs and improving productivity.
The cost per tonne of traffic carried can be improved dramatically if the railways take the steps required to bring in more high-value traffic, because the overwhelming bulk of the cost is fixed, and variable cost is quite small.
One obvious area to begin cost-cutting is energy consumption. The easiest way to do this is to stop buying power from the SEBs (state electricity boards) at exorbitant rates and to get into an agreement with NTPC (National Thermal Power Corporation) to access much cheaper power.
There is a move for a joint venture power company with NTPC, but that is unnecessary. The latter should find no difficulty in raising finances for a dedicated power station for the railways, if the latter were to execute a power purchase agreement.
The railways have loads of escrowable cash. Instead, the railway minister and the petroleum minister have joined hands to promote the manufacture and use in the railways of bio fuel, and the railway minister has also promoted a bottled drinking water project for rail passengers.
Nobody has taught him the logic of outsourcing what is not part of your core competence.
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