Dr. Syama Prasad Mookerjee Research Foundation

“Transparency leads to profit making”

By Aseervatham Achary

It was the fag end of UPA Rule in the month of January, 2014 when all the Principal Chief Engineers and Chief Administrative Officers of Construction across all  Zonal Railways were brainstorming sitting in Rail Bhawan (where the Railway Board, the HQrs of Indian Railways is located).  The meeting was focused on the importance of introducing “e-tendering” in all Works Contracts (Works Contracts are the Contracts for any construction related activity of Indian Railways viz., laying of tracks, construction of railway stations, railway schools, railway hospitals, and their maintenance).The Chiefs of these constructions organisations were highly skeptical about the viability of e-tendering considering the fact that a huge volume of tenders are floated every day across 68 Divisions in 17 Zonal Railways (including Construction Wing of NF Railway).  A few of them thought that the power of tender finalisation (the most important and prestigious job a Railway Officer would be happy to do from the day he joins Indian Railways) will be taken away from them and would be handled by a machine (say a Computer) henceforth.

The officials of Railway Board were dumbstruck as to how to go about the fulfillment of the directions given by Ministry of Finance.  The previous year, [2014], the Ministry of Finance had issued a direction that all the procurement across Government of India should only be floated on e-platform and manual submission and vetting of tenders should be stopped forthwith.  If the words of their counterparts were to be given weightage then the directive of Ministry of Finance could never be implemented; at the same time, non-implementation of this directive would be viewed seriously by the Vigilance Directorate of Indian Railways.

On 1st February, 2016, Shri Suresh Prabhu, the Railway Minister, inaugurated the e-tendering in Works Contracts across the Indian Railways.  Followed by launching of the system by Suresh Prabhu, an order was issued on 5th February, 2016 asking all the concerned officers of Indian Railways (from Division/Workshop level, to HQrs level at Zonal HQrs) asking them to shift to Indian Railways’ E-Procurement System (IREPS) which was indigenously developed by Centre for Railway Information Systems (CRIS), their own in-house IT developer.  The order further says that all the arrangements, like computer room with internet connectivity, training to Railway and other users along with related pre-requisites of Digital Signature Certificates, Encryption and on-line payment facility should be ensured by the stakeholders.  The time limit for migration to e-tendering process has also been notified with 50% migration for value between Rs. 2 crore and Rs.20 crore in February & March of 2016, and by 1st of April this year the 100% migration to e-tendering is achieved.  Though this is a great task for the Zonal and Divisional Level, but achievable if dedication and perseverance are put in use.

On 26th of February last year, when Suresh Prabhu, the Union Railway Minister stood in the Lok Sabha to present his maiden Railway Budget, he announced that “The Railways belong to the whole nation.  Its functioning must conform to the highest standards of governance and transparency.  Indian Railways’ decisions must be fair to all our stakeholders; from our poorest customers, to our employees and our business partners”.  He not only read his Budget speech just for the sake of reading it; but also implemented the announcement by delegating all the tender approving powers to the level of General Managers.  Never in the history of Indian Railways, had a Railway Minister has given away his own powers of tender approving and delegated them to the Zonal Railway Managers.  Rather we have seen instances when Zonal Railway Managers were asked to send high value tender files to the Railway Board and from the Railway Board they were marked to the Railway Minister for decision.  In fact, there was an instance wherein a proposal was floated for bringing down the threshold value of “tender finalising power” of a Zonal level officer so that the files start moving up in the hierarchy for decision making at the level of a Minister, during the UPA rule; because high value tenders running into thousands of crores of rupees. But, for the first time, a Railway Minister delegated his own powers to his subordinate officers, those very subordinate officers  who were reluctant to give away the tender finalizing process to a machine just a year back.  Thus the words of Suresh Prabhu, “Studies have shown that greater transparency and accountability are pro-poor instruments, since the relatively poor suffer more from lack of transparency” stand proved now by his determination of implementing e-tendering on Indian Railways.

Indian Railway’s own vast land bank worth of Rs.6,786.76 Crores, next only to the Defence establishment, and a value of its assets in the form of Building and Tracks has been placed at Rs. 1,79,997.89 Crores.  Besides, it has got Rolling Stock worth of Rs. 68,241.76 Crores and has got another Rs. 40,458.83 Crores worth of Plants and equipments.  On any given day, a hundred tenders are floated by some organization or the other of the Indian Railways either to build a new asset or to maintain the already existing asset.  The value of these tenders ranges from Rs. 2 Crores to a few thousand Crore in one single tender.   Floating the tender, receiving the bids, opening the bids, negotiating with the tenderers – if need arises – and finally awarding the tender have been the prestigious works handled by the officers of Indian Railways because of enormous financial powers vested with them in the form of “decision making authority”, under Indian Railways Act, 1890.   This is the reason why these officers were either resisting or were not-willing to accept the e-tendering process and expressed skepticism at every possible level.  However, when Suresh Prabhu announced his own intention of delegating his powers of tender finalization to his Zonal Railway Officers, their eyes got opened and they started seeing the advantages of such a system of delegation of powers to the subordinates thereby making them more involved in the system of decision making process.

Will this e-tendering process result in transparency and result in productivity?  Of course, it will lead to high levels of transparency in decision-making process.  The electronic e-tendering platform will not succumb to any whims and fancies; neither will it be prejudicial against anybody.  “Absence of human interface results in more productivity”.  This is the reason why Hon’ble Prime Minister Narendra Modi asked all the staff recruiting agencies of the government to move from paper-pencil tests to online tests for recruiting staff members for government organisations.  The tenderers, many of whom almost always keep a margin, will no more keep that extra margin and quote the actual cost plus marginal profit for carrying out the project.  Similarly, they will invest all the money received from Indian Railways as “advance” on the project thus improving the quality of the completed project.  This will ultimately result in augmenting better safety standards and less train accidents.

Under Modi Sarkar, Indian Railways has achieved 91.3% of Operating Ratio which has surpassed the average of last 7 years, thanks to the vision of Narendra Modi.  Less the Operating Ratio, more will be the profit.  When Indian Railways make profit that profit gets passed on to the users – both passengers and freight marketers.  Further, Suresh Prabhu has aimed an investment of Rs. 8.56 Lakh Crore in the next five years; with the quantum jump in Plan Outlay for the year 2015-16 to more than Rs. 1 Lakh Crore (The Plan Outlay for the year 2014-15 was Rs. 64,445 Crores only).  He expects an outcome of 1.5 billion tonnes of freight movement by Indian Railways and a transportation of 30 million passengers per day in the year 2018-19.  He achieved a track commissioning of 2500 Kms. in the year 2015-16 wherein 500 Kms. of New Lines, 800 Kms. of Gauge Conversion (from Metre Gauge to Broad Gauge as part of Uni-Gauge Project) and 1200 Kms. of Doubling of existing Lines were added to the existing Railway Network in the country.  He further aims to take the per-day average of track construction from  6.85 Kms. (FY 2015-16) to 11 Kms. in FY 2018-19.

Suresh Prabhu is also the first Railway Minister who has aimed for a 360-degree transformation of Indian Railways covering around 12 parametres ranging from Resource Mobilisation to PPP/FDI Infusion to Environmental Initiatives to Policy Reforms to Transparency.  Probably, his earlier stint in the Ministry of Environment & Forests under Shri Atal Bihari Vajpayee, comes in handy while he plans for a “Green Railways” which is a sustainable and happening area of economic drive for the well-being of the country under Shri Narendra Modi.

Coming back to e-tendering, I must confess that there exists a very big disadvantage on its implementation.  The disadvantage is that “Arts of bribe-giving and bribe-taking will have their natural death!”  But then death, in such a case is to be welcomed.

(The author is a former Officer of the Indian Railways.  He is a Member of the Library & Documentation Department of Bharatiya Janata Party and is associated with SPMRF as a Research Fellow)