The Telegraph
Since 1st March, 1999
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Pro-reform Nitish faces flak from within

New Delhi, July 1: Railway minister Nitish Kumar is fast emerging as the new face of reforms in the National Democratic Alliance government, but is unlikely to get the necessary support from the railway family.

The sudden move to supersede 11 railway board officials by appointing R.K. Singh as the new chairman of the board has its genesis in two controversial reports to restructure and corporatise the railway — the Asian Development Bank report prepared by McKinsey and the Rakesh Mohan committee report.

Both the reports had strongly suggested a longish tenure for the chairman of the railway board and its members to implement policy decisions.

Initially, Nitish had rejected the recommendations of both the reports following an internal vigilance report that indicated there could be a major destabilisation in the functioning of the railway — similar to the strike initiated by his party leader George Fernandes in 1974 that lasted for 20 days.

However, slowly, Kumar has started to implement the reforms suggested in the two reports.

The McKinsey report, jointly prepared with SwedeRail, had said the concerns with the governance model for the Indian Railways relate to the need to ensure continuity in the leadership group and address the potential imbalance between its policy and operational roles. The key challenge and initiative that needs to be taken to resolve this includes ensuring continuity of the leadership group.

“The current tenure of the board members, ranging between nine to 18 months on an average, is too short to provide them with a long-term, strategic view. The shortness of the tenure also limits their ability to shape and drive the implementation of any significant change. Therefore, in the long term, the Indian Railways should identify a mechanism that helps increase the tenure of board members to at least three to five years,” states the McKinsey report.

The recommendations of the report have now been accepted by the Indian Railways. Singh will have a tenure of two years and one month as the chairman of the railway board. His tenure will be the third longest; two earlier railway board chairmen had tenures of three years each.

At the customary meeting with the media after taking charge, Singh said there was no resentment or dissidence over his appointment. Refuting reports that several board members were planning to resign in protest, he said: “In a family, there can be unpleasantness. But we always sort it out. My appointment was cleared by the appointments committee of the Cabinet. I would not like to comment further on it.”

Another controversial report prepared by Rakesh Mohan that was widely debated and discussed with the railway minister spending two days at the Vadodara railway staff college along with former and the then existing railway board members had explicitly recommended the abolition of tenure-based promotions.

“Tenure is an old chestnut but remains a key issue. Tenure-based promotions may have many advantages but forming a powerful team of leaders is not one of them. A system which effectively rewards those on the basis of seniority and age with position on the board for a few months prior to retirement is not a mechanism to breed leaders,” states the Rakesh Mohan committee’s report on Policy Imperatives for Reinvention and Growth in Indian Railways.

However, senior officials in the railway board and their juniors feel that this will breed incompetence and nepotism. “We work through our careers without much monetary benefit (compared with private companies); the time-bound promotions are a source of inspiration. The new system suggested by the reports may be good for the new batch but we have spent 20-25 years in this organisation. How will the government compensate us'” asked a senior board member.

Kumar is not moved. He has asked the personnel department to study the Rakesh Mohan report and evolve a mechanism to induct people from outside the Indian Railways into the board. The panel has said the most important change needed for corporatisation is to revise personnel policies to “make these comparable with those in the private sector”.

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