Railways can stop loot of Rs 10000 cr through decentralisation, suggests 'Metro man' E Sreedharan

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New Delhi, Apr 2: To help cash-strapped Indian Railways become a profitable organisation, 'Metro man' E Sreedharan has suggested the Centre to stop centralising procurement of powers to the Railway Board for it will help the state-owned carrier save Rs 10,000 crore annually.

'Railways can save Rs 10k cr annually'

As per a TOI report, in his final report on 'delegating tendering and commercial powers to general managers and other operating levels' of railways, Sreedharan (82) has pointed out that by centralising procurement powers, the railway board has accumulated enormous sum of money in the hands of few.

This has hugely enhanced rent-seeking power that encourages corruption, said Sreedharan committee's final report submitted on Mar 15. [NGT cracks whip on litterbugs! Rs 5,000 fine for littering on railway property]

"Procurement is through cartel only, list of approved sources and cartels are synonymous... there is no item in which there is no cartel... Committee feels that vendors thus continue to fleece at will," Sreedharan was quoted by the report as saying.

The report further said, "The committee after scrutinising current practices and procedures followed at the board concludes that improving and decentralising the system with empowerment and accountability shall effect annual economy to the tune of rupees five thousand crore in stores procurement and equal amount in works contracts."

The committee has recommended that the Railway Board should be dissolved as it has failed to do its job. The board should not take any commercial decision, and even procurement for its own needs should be done by the northern railway. It has called for decentralisation of all those powers to general managers and lower levels.

Railways is the second biggest procurement agency after defence, spending almost Rs 1 lakh crore a year and the railway board procures almost half of it.

Indian Railways is the second biggest procurement agency after defence, spending almost Rs 1 lakh crore annually and the Railway Board procures almost half of it. [Prabhu promises India modern rail network with no fare hike]

The final report, which came three months after Sreedharan had submitted an interim report to Prabhu, is a significant step in the decentralisation of powers in the Railways.

In his interim report, submitted on November 27 last year, the 'Metro Man' had suggested greater delegation of powers to General Managers (GMs) and Divisional Railway Managers. The one-man committee also heard views of senior officials.

The final report further said that Indian Railways today is at a cross roads and it has reached such a stage of centralisation, non-transparency, inordinate delay and non-accountability in commercial and other decision-making that an incremental and evolutionary solution will not suffice.

Sreedharan was last year appointed by Railway Minister Suresh Prabhu to head a committee to bring transparency, and accountability in the Indian Railways.

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