Draft Discussion Paper on Integrated Transport Policy

Organisational Structure

8.2 At present, the railway system is a monolithic departmental enterprise which covers provision and maintenance of the track network, operation of freight and passenger services, and also substantial production units producing rolling stocks. Some countries have successfully segregated track management from rail operations. The approach has yielded dividends in terms of more efficient services at lesser cost. The ground infrastructure such as rail-bed and switching and signalling system are a natural monopoly and have to remain in public sector. These could be segregated into a separate corporation. Rail passenger and freight services could in principle be provided by separate corporate entities organised at either central or regional levels. Gradually, the private operators may also be allowed to compete in the provision of rail transport services. This is being done at present on ad-hoc basis e.g., tourist trains but the organisational change of segregating track from services would make it possible to explore these possibilities more systematically in future. The scope for applying these innovations in India needs to be systematically examined.

8.3 There is no obvious advantage in integrating manufacturing of rolling stocks (locomotives, coaches and freight cars) into the monolithic departmental enterprise. The existing six manufacturing units of Indian Railways, could be easily split into independent profit and cost centres and thereafter corporatised.

8.4 The major ports in the country are organised as trusts and these are administered by a Board of Trustees under the control of Ministry of Surface Transport. Over the years, the trusts have become large bureaucratic organisations. It is essential that the ports are corporatised. This will impart greater autonomy, flexibility and accountability and eliminate time lags in decision making. Moreover, as corporate entities, ports will have access to institutional finance on a larger scale since port assets can serve as collateral for the financing institutions. Foreign collaborative ventures will be far smoother with corporatised ports. All the major ports may be corporatised by 2010.

8.5 The road transport passenger operators also need to be organised on sound corporate lines to promote safety and reliability and for provision of services in remote and backward areas. The State Government should formulate the guidelines which may lay down the minimum viable size of the fleet, criteria for technical and financial soundness of the operators. This will also help in the effective implementation of laws, rules and regulations governing the operation of road transport.

8.6 In the road transport freight, it is necessary to take action mainly by the State Governments for creating co-operative of small truck operators. The truck owners’ co-operative could link up their operation closely with large undertakings to reduce their cost and improve the utilisation of the fleet.

8.7 In case of airports a beginning has already been made with the decision to corporatise five airports including four major international airports. This decision is required to be implemented in a time bound manner.