Railways a 'sunrise sector': IIM-A

New Delhi, Sep 6 (UNI) Ahead of his September 18 lecture at the IIM, Ahmedabad, Railway Minister Lalu Prasad today witnessed a presentation on the spectacular ''Turnaround of the Indian Railways'' by a don of the prestigious business school, who made a strong case for the induction of a ''corporate culture'' in the government's biggest department.

''The growth momentum of the Railways can be sustained if political leadership is well-intentioned and has consistency of direction. More importantly, top management needs to be commercially- oriented with a corporate culture,'' Prof G Raghuram of the Indian Institute of Management, Ahmedabad told reporters after his presentation at the Rail Bhavan.

To reinforce his contention, Prof Raghuram cited the report of a Mckinsey study, commissioned by the Asian Development Bank, which described the Indian Railways as a ''sunrise sector'' and strongly suggested investments by financial companies in it.

''The turnaround over the past two years has demonstrated that Indian railways is indeed a sunrise sector. With the right moves, nothing can hold it back from being world class,'' he said.

Charting out a slew of recommendations, he said the strength of the Railway Board should be increased to give a cutting edge to its functioning. In effect, he suggested that there could be separate members to take care of freight operations and parcel business, which had the potential to earn huge revenues for the Railways.

As part of the overall strategy, the IIM don said the Railways would have to sustain its growth strategy through higher volumes, lowering the unit costs, revenue management, freezing freight rate increases, rationalising the commodity classification, increasing asset utilisation and wholesaling rather than retailinjg.

More importantly, he said the Railways would have to outsource part of its operations through outsourcing.

In the freight sector, he said the railways' strategy should revolve round increased axle load, reduced wagon turnaround and market-oriented tariffs and schemes.

In the passenger segment, it will have to introduce longer trains with more coaches, pay greater attention to passenger amenities through 'Touch and Feel' initiatives and streamline Tatkal scheme.

''The increase in Railways' total earnings of Rs 7121 crore can be doubled in next two-three years, and it is definitely feasible,'' he said.

He, however, cautioned the Railway Minister not to sidetrack safety aspects, particularly of its freight operations. ''Increasing axle load needs scientific basis rather than just empirical basis.

Safety of tracks in the face of increased axle load has to be given utmost consideration.'' Prof Raghuram also suggested improving the quality of the ticketing transaction, value added and basic services at stations and passenger amenities on board trains, setting up low budget hotels and leveraging tourism business.

Showering praise on the functioning style of the Railway Minister, the IIM professor, in his presentation, observed: ''With whatever has been achieved in the 'turnaround, Mr Lalu Prasad has demonstrated that good economics is good politics. It was a commonsense-based approach, showing an astute understanding of the market reality, the asset base of the Railways, its expertise and capability of its management and systems.

''Consequently, he followed this up with the principles of leveraging the assets (milk the cow fully).'' UNI/SKS HS KP2033