Reforming the Railways vital

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2017-12-15

The Cabinet of Ministers this week decided to declare the Railways, Health andsectors closed services in order to solve issues plaguing them and also thwart strike action by employees.

The decision helped the Government to halt the on-going railways strike that had stranded tens of thousands of passengers and disrupted the supply of some essential goods to the market.

By this decision it will now be possible for the Government to raise the salaries of employees in each of these sectors without having to grant commensurate increases across the entire public service which has an estimated 1.5 million employees.

Co-Cabinet Spokesman, Health Minister Rajitha Senaratne said the Railway Unions had proposed this idea and said that three-quarters of the issues the members faced would be solved with this change. He added that "the issue was technical and this dates back to the decision to reduce salary scales of the State Sector from 132 to 32 in 2006."

He also said, the Government intends to increase the salaries of the Railway workers 'even higher than they asked.'

That comment raises a number of questions, particularly when you take a glance at the financial performance of the Department.

In 2015, the total expenditure of the Department was Rs 44,485.02 million while earnings were a fraction of this Bill at Rs 6,334.6 million. In fact, the Wages Bill in the same year was Rs 8,165.65 million, nearly two billion rupees more than the total revenue.

So, clearly any wage hike for the Railway workers would have to come from the public exchequer.

In colonial times, the Railways was a major source of revenue, particularly from the transport of freight. In fact, the main reason for building railway lines in Sri Lanka was to bring produce, particularly Tea and Rubber to Port. That is why the first trains ran from the tea producing highlands to Colombo.

But, now things have changed to the extent that earnings from freight are a little over Rs 500 million, a fraction of the amount earned from passenger carriage. In wider terms the Railways carry just about 1 per cent of all the freight in the country. Shifting more freight on to the trains will take more trucks off our already congested roads.

In a report evaluating the transport sector 10 years ago, the Asian Development Bank said, the challenges facing "Sri Lanka Railways do not result from capacity constraints. Sri Lanka Railways is trapped in a vicious cycle that is driven by a monolithic organization unable to reform, a high cost-structure coupled with poor service quality, declining traffic, inadequate cost recovery, and insufficient resources for modernization."

It criticized the maintenance regime of the Department and as a result, "the railway infrastructure and rolling stock have deteriorated, reducing the quantity and quality of service that the system is able to provide. The decline in Sri Lanka Railways' rolling stock over the last decade is a result, rather than a cause, of the cyclical problem."

The report also found that "officially, expenditures for maintenance and investments have an equal share in the overall allocation for railways. Similar to the road sector, capital expenditures for railways are used to reduce a backlog of deferred maintenance so, that real capital allocations may be overrepresented."

During the days of the last Government, there was a concerted effort to address these issues raised by the ADB. There were moves to update the rolling stock and the new air-conditioned trains that were introduced with better scheduling have helped the Department to attract a newer set of passengers that include the increased tourist traffic flowing into the country after the end of the war.

But much more needs to be done.

The Government needs to step in and get help to completely reform the Department. A comprehensive plan in the Greater Colombo area to move workers from their homes to offices would be popular and revenue generating in the long-run. This will also hopefully reduce the traffic woes on our roads.

It also needs to take a good look at the number of employees and create efficiency. At present, there are nearly 18,000 workers in the Department, and you cannot help, but wonder what all of them are doing.

Reforming the Railways will bring multiple benefits to the economy and that is certainly the need of the hour.

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