Media and Frustrating Confusions

Many a time it becomes difficult to decide the real picture. We naturally base our opinion on the information available from media. Two recent confusions come to my mind.

Lalu Yadav and his turnaround story of the Indian railways has become a legend. Prof. G. Raghuraman of IIM-A prepared a case study on it and made Lalu talk with the best brains of the country in the institute. Lalu became an icon among management education circles not only in India but, as reported, also got invitation for presenting the turnaround story even in the best management schools of the world. Prime Minister who himself is a master in turnaround and globally reputed economist, talked publicly so highly about Lalu’s contribution to Indian railways as unprecedented and revolutionary. And then suddenly one comes across a story such as one in ‘Outlook’ (September 24 issue) by Bhavana Vij-Aurora that takes away all his clothes and makes his real image known calling all his turnaround of railways as the great sleight of hand.

  Rs 9,000 crore pension funds shown as cash surplus
  Miscellaneous funds-Rs 2,500 crore-included in earnings
  Rs 1,700 crore due to the Indian Railway Finance Commission as dividend for lease of wagons put in the profit account
  Profits shored up by showing advance earnings for 2007-2008 in last year’s balance-sheet
  Monies in the suspense account-funds promised but not yet transferred-reflected in the earnings/profits
  Tonnage carried by freight trains raised despite repeated objections and safety concerns. This brought in Rs 5,000 crore.
  Hidden costs to passenger tickets earned the railways Rs 325 crore

And then

Milking Tatkal: This was for passengers traveling in an emergency. Less than 10 per cent seats were kept in the tatkal quota and released on the scheduled day of departure. The surcharge was Rs 100 per ticket. Now 30 per cent seats have been set aside for tatkal and reservations open five days before departure. The surcharge is Rs 250 per ticket. Additional earning for railways: Rs 150 crore.

Declaring Trains Superfast: More than 100 express trains have been declared Superfast though their running time remains the same. The Superfast tag attracts a surcharge. This upgradation meant Rs 75 crore in the coffer.

Upping Cancellation Charges: Doubling cancellation charges has helped. Added profits: Rs 100 crore.

Costlier Return Tickets: Surcharge on return ticket earned the railways Rs 30 crore.

Pay More for Onward Journeys: You can no longer buy a single ticket if you have to change trains for an onward destination. For example, a person traveling from Mumbai to Guwahati could earlier buy a Mumbai-Howrah-Guwahati ticket for Rs 557. Now, he has to buy a Mumbai-Howrah ticket for Rs 517, and another ticket for the Howrah-Guwahati leg for Rs 369. Added profits for the railways: Rs 100 crore.

Which one should a person like me take it as correct? Should one believe Laluji for his benevolence towards the people of India, particularly aam aadami or a journalist?

And the ongoing war on Ram Setu is another example. I don’t bother if the project demolishes the so-called Ram’s bridge, but I am certainly concerned if it is economically or technically unviable project. Swaminathan S Anklesaria Aiyar now in Sunday column of Times of India says, ‘Sethusamundaram project is a 150 years old idea for 150-year old ships.’ As against all the advantages and claims listed in its favour in the project documents, Aiyar quotes from a recent study by Jacob John in Economic and Political Weekly that exposes the claims as highly exaggerated.

Project documents claim that the canal will save ships 36 hours of time and 570 nautical miles of distance. But a recent study by Jacob John in Economic and Political Weekly exposes these claims as highly exaggerated. Up to 70% of the traffic through the canal is projected to come from Europe and Africa. And John estimates that the time saving from Europe to Kolkata will be only eight hours, and the distance saving 215 nautical miles. From Africa to Kolkata, the time taken will actually increase by 3.5 hours (being piloted through the canal is a slow process), and distance reduced will be only 70 nautical miles.

John calculates that ships could lose up to $4,992 per passage if they are charged the tariff laid down in project documents. In which case ships will find it cheaper to go round Sri Lanka. If the government cuts the proposed tariff to attract traffic, John estimates that the project’s rate of return could fall to an uneconomic 2.5%.

Sethusamundaram is designed for small ships (the project documents talk of 20,000 DWT), whereas the Panama Canal takes ships of up to 65,000 DWT and Suez takes ships up to 150,000 DWT.

Instead of making the project a religious issue and fanning the sentiments of the people to divide the country and its men on non-issues, why BJP as well as DMK not answer the relevant viability questions transparently? Why can’t we have data on the ships up to 20,000 DWT that could have taken the new route? Why can’t the specification be improved to make it up to Suez? .

Unfortunately, again Manmohan Singh does not bother to talk of this technical aspect of the project and give his views, and the ruling party and the government is busy sorting out the affidavit issues that are just useless for the people at large.

In all such cases, how does an ordinary citizen get confidence in justification of its huge cost to the nation when millions are still below the poverty line and something urgent in a fast manner still to happen?

Why are the parties not answering the most important question? Should the cost overrun of the project be also a consideration? At the project’s inception in 2004, the budgeted was Rs 2,400. As reported, the costs have skyrocketed to at least Rs4,000 crore. Even before the first dredger began its work in 2005, costs had already spiraled to more than Rs3,500 crore. Would Sethusamudram Corp. Ltd have to return to the drawing board, draw up new reports, sit with parliamentary committees and receive fresh approval?

I get reminded of Sudheendra Kulkarni, the IITian ideologue of BJP making a remark somewhere, ” I doubt if our two main political parties, Congress and BJP, are even aware of what is happening in India, thanks to their lopsided economic policies.” So perhaps all the Indians today have started to doubt.

And if the articles in Outlook and TOI are factually wrong, why should there be no action on it?

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