Cash Crunch Comes to Fore, Railway Official Transferred for Flagging Crisis

New Delhi: The current economic slowdown in the country has started affecting train cleaning operations, part of the Prime Minister’s high voltage Swacch Bharat campaign. Meanwhile, the Railways, more keen to curtail expenditure in the face of falling revenue target, has made an overdrive to hide the crisis under carpet.

Besides cleaning, payment of medical bills and maintenance has also hit the wall as railways is keen to curb expenditure to improve operating ratio.

The irony of the situation is that the railways aims to spend Rs 50 lakh crore in the next 10 years while the capital expenditure for the current fiscal has been kept at Rs 1.6 lakh crore in the Union Budget.

Railways has a mandate to provide clean and hygienic toilets, linens and organise regular pest control exercise in coaches with the aim to improve passenger amenities at rail premises.

Since the Railways has outsourced these activities, the cash crunch has affected the payments to contractors on a regular basis. As a result, billings have piled up, forcing a zonal railway to stop the Swachh Bharat activities in its divisions.

Also read: Blankets Provided in Trains to be Washed Once in a Month: Indian Railways

After repeatedly flagging the issue and writing to the Railway Board seeking funds, the concerned official in the Southern zone was forced to direct all the six divisions – Trivendrum, Chennai, Salem, Madurai, Tiruchi and Palghat – to issue notices to contractors putting the On board Housekeeping Service (OBHS) in abeyance in 86 trains with effect from September 1.

However, alarmed by the abeyance decision, the railways finance wing tried to save the situation by allocating Rs 50 crore to clear contractual payments.

But instead of addressing the problem upfront in a permanent way, Railways unceremoniously transferred the concerned official, who is also behind the successful manufacture of the Vande Bharat Express, the first trainset built indigenously, out of the zone for flagging the issue.

“It is a clear case of messenger being shot instead of addressing the message,” a railway worker said, while for the railways “all is well and there is no dearth of funds for implementing OBHS in trains.”

The OBHS, pest control and linen supply are essential for maintaining clean and hygienic condition in rail premises. Currently, railways have OBHS in 1,080 trains including Rajdhani, Shatabdi, Duronto and all Mail/Express trains.

Railways has two funding sources – capital and revenue. Since revenue comes from passenger and freight earnings, it is well below the target in the current phase of economic slowdown.

In the face of dwindling earnings, railways is opting to curtail expenditures in amenities and maintenance by capping the monthly fund release in order to paint a rosy picture of operating ratio.

Though there is plenty of funds for laying new lines because it will come from capital and burrowing, railways is also taking loans to pay the debt service which can be described as debt trap.

Since the fund for maintenance and cleaning come from revenue earnings, railways is capping expenditures resulting in problems for these areas.

According to the railways’ finance directorate, loss in passenger segment is touching Rs 42,000 crore coupled with the traffic earnings below the revenue target which is causing concern for the State-run transporter.