Probably, the panacea for all the Railways' ills has now been sought once more in privatisation described as, 'commercialisation' under private-public partnership.

The first hasty and ill-considered attempt to privatise this state-run unit was made around late-nineties when it was decided to 'unbundle' the 'vertically-integrated' Railways, (without understanding what it implied) copying the British pattern. The idea of corporatisation has been toyed with for quite some time as well.

Such and other restructuring proposals have all ended up in smoke, missing the real point—the additional administrative cost for an already top-heavy, inefficient and loss-making organisation. The size of the headquarters has increased from less than 1000 to more than 3000 personnel over the last ten years while the total employee strength had shrunk from 1,20000 to 86000.

The Railways has had a taste of private-public partnership as well. A private party franchised a train operation on Lahore-Faisalabad section in early nineties.

That created more problems than it solved and was abandoned, leaving the national enterprise in a greater mess. In the realm of real estate, the most publicised example of the public-private partnership was the conversion of 2500 acre Railways Golf Club into Royal Palm Club which did not bring any relief to Railways' finances.

The upshot of all such initiatives feigned to improve the organisation, among other things, has been that its net loss climbed from less than a Rs1 billion 1992-93 to Rs13 billion in 2007-08 despite the decrease in number of employees by almost 35 per cent and an estimated fresh investment of Rs85 billion.

Privatisation in right earnest may have a lot of merit and could be justified on various counts for non-performing enterprises in deep financial distress, railways perhaps being no exception. High sounding and state-of-the-art jargon could be employed in its support but economic history of the capitalist world, however, is replete with swings in public policy from government's participative role in economy to free play of market forces.

When government hegemony is seen as exacerbating the economic and financial problems, the case for market-led mechanism is propagated and when the 'invisible' hand of free markets is perceived getting out of control, the 'visible' hand of government steps in.

The actual experience shows that once one alternative gets saturated in its entire ramification and adverse symptoms hurting strong vested interests begin to show up, the policy pendulum starts swinging towards the other side.

In all fairness, an all-weather basis for a more meaningful and sustainable decision either way should be the broad social costs and benefits rather than narrow financial or economic considerations. Defence imperatives, environmental implications, market imperfections, social deprivations and other externalities should also explicitly figure in the decision-making without compromising on efficiency, economy and effectiveness. And the Railways could be no exception.

For some time in the past, quite a few state-run railways world over had taken the route to privatisation, when it was the buzz word, to alleviate their problems. But after the experience of some years, the early starters are beginning to show a mixed reaction to the process.

British Railways-- the pioneers--, for instance, faced serious safety concerns because of nasty accidents and later had to retrace some other steps as well in certain areas.

Besides, privatised Railways continued to burden the public exchequer and the taxpayers heavily; the amount of subsidy increased threefold while passenger fares doubled over ten years, casting doubts over the efficacy of privatisation.

The German Railway has put the process on hold after years of pursuit. Signs of a second thought have started to show up. How the current global recession is likely to affect the privatised entities is yet to be seen.

It is open to question whether it is appropriate to announce such a policy at a time when, on the one hand, national economy is beset with investment deficit while the global recession seems entrenched, and on the other, experience of privatised railways has sounded abundant caution.

One view is that despite all the good intentions (really?) the policy of privatisation is bound to go to the back burner since conditions precedent to implementation are nowhere in sight. The Railways unbridled overdraft alone is a predicament which overshadows everything else. The Railways is squeaking under the burden of incompetence, mismanagement and corruption and every facet of it runs the risk of gross under-valuation. Privatisation in a big way is thus out of question.

Some view the policy pronouncements as nothing more than a knee-jerk reaction to vent the frustration on the Railways' precarious condition, financial and otherwise and its management's inability to come to grips with its worsening problems.

The State Bank's recent refusal to honour Railways' cheques in the face of the colossal overdraft and its implications for its operations support this contention.

To resolve the problems, the Railways will surely start packing its marketing department with highly paid MBAs as if that is the remedy for what ails it. It is not. The result will be additional cost and sure rift and disharmony between cadres. The organisation should be focusing on something else.

Yet another view is that the policy is to be used just as a ploy to get hold of Railways precious properties, particularly in the urban centres, in the name of commercialisation and under the garb of private-public partnership. Given the 'success' story of the private sector — protective SROs, tax evasion, over/under invoicing, kickbacks, adulteration, cartelisation, lack of ethics and accountability — it seems most plausible. The danger is that this course of action will most likely get precedence over all others, leading to predominance of peripheral activities for an already distracted management and an open field for corruption.

Truth is an amalgam of all the above viewpoints and weighs heavily in favour of outright rejection of the declared privatisation policy.

A considered opinion is that privatisation or no privatisation, the Railways is too valuable a national asset to be left sinking in the quicksand. It has to be pulled out of its financial distress since it has a definite role to play in the socio-economic milieu that legitimately belongs to it. The organisation needs a quick turnaround. First of all, it must be made to stand on its feet.

There is a sure way of doing that while retaining the Railways' as a state-owned organisation and without indulging in costly experimentation. If right steps are taken, the organisation can turnaround within 3-5 years.

The Railways has a latent potential in its core business which needs to be fully exploited. That is where its bread and butter lie.

The management needs to approach this potential with business-responsive demeanour, undiluted focus and targeted investment.

It should remain on track of its core business and shun the temptation of sidetracking in peripheral activities to avoid running into a dead end. And for that, something must be done.