25 cost cutting ideas for Indian Railways
Lalit Chandra Trivedi, Retd. GM/ECR
1. Staff costs eat up 70% of Indina Railway’s (IR) revenues – number needs to be brought down from 12 lakhs to 6 lakhs – This will besides reducing cost of operations will make IR more efficient.
2. Proceeds of Land and assets monetisation should be used for retiring debt besides for expansion of network. It has potential to convert IR from debt seeker to a financier.
3. Disel consumption needs to be restricted to 10% of current levels.
4. Use of stainless steel in manufacturing rolling stock and other structures shall eliminate cost for corrosion repairs besides leading to increased asset life.
5. Multiple cadre restructuring have made IR top heavy. Organisation needs to be made flatter, lean and mean.
6. Digitisation of entire gamut of activities – interactions among various stakeholders need to be faceless /paperless / VC based/Web based with use of digitally signed documents and information stored in organisation cloud.
7. Replace perfunctory inspection by need based and result oriented inspections.
8. 30 odd categories of staff allowances, 15 odd categories of staff advances are presently payable. Need to be rationalised. Eight km benchmark for payment of TA should be abolished and only reimbursement of actual expenditure incurred should be resorted to.
9. Sub optimally used assets shouldn’t be acquired and need to be hired only.
10. Use of GEM portal for procurement general items and services.
11. Anything which can be outsourced without diluting delivery and quality standards shouldn’t be done departmentally e.g. cleaning activities, building maintenance etc. Wet leasing of assets should be resorted to.
12. Manpower Yardsticks laid down for various activities should be abolished.
13. Review of single source/two source item need to be eliminated- by designing for standard items available at lower rates.
14. GM should be empowered with a single page list of negative powers.
15. Loco utilisation to be increased to 1000 kms/day, pre departure detentions should be eliminated.
16. Production Units to be individual profit centres similar to their private sector counterparts like ALSTHOM. Bombardier, Siemens, WABTECH etc.
17. Assets not required should be grounded and not subject to preventing maintenance schedules.
18. Secondary examination of express trains should be scrapped.
19. Having mechanised track maintenance, the associated staff strength needs to be brought down.
20. Many units like CAMTECH, CMA etc need to be wound up.
21. Incentive schemes of workshops need to be reviewed.
22. Overtime allowance should be paid for by compensatory rest.
23. For discharge of normal routine duties no allowance should be admissible.
24. Fixed time based maintenance schedules to be replaced by need based attention for many assets.
25. Private ownership of Railway assets (like wagons, coaches, track machines etc) need to be encouraged and incentivised.
Some opinions on the above post by Lalit Chandra Trivedi on LinkedIn –
“Cost control is very important for efficient delivery and efficiency. IR need to ponder over these measures. While the expenditure is required to be brought down by 30 to 40% of present level, the earnings also needs to be enhanced to 150 to 200%. The efficient timely delivery will enhance IR share of over all traffic in the country.” -Debi Prasad Dash, PCEE/IR
“Your excellency, will you please elaborate the definition of “staff” in this context?” -Sameer Joshi, JE/TRS/EMU/IR
“Staff means expenditure under the head salary, allowances etc. A sustainable organisation should be able to pay for running expenses, machinery and plant+rolling stock replacement without borrowing, which should only happen for capital asset acquisition with a positive rate of return.” -L.C.Trivedi
“I think the outlook should be how to increase the traffic, specially goops & also passenger traffic. This is economical and environmental friendly. Having spent so much on assets creation which are long lasting, creating an impression of negative approach at this stage creates social tensions. The aim should be how to effectively use which is possible and desirable to divert the goods traffic from road to rail. The specific energy consumption by rail is less compared to roadways apart from saving in fuel oils which is mostly imported and polluting. All aspects need to be studied and analyzed as these are national assets and all concerned should be made aware.” -Venkataratnam C. Retd. CE/IR.
Courtesy: L.C.Trivedi page on LinkedIn
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