Indian Railways operates 39,500 miles of railroad lines, has roughly a million and a half employees, and a little over one million people on the pension roles. On any given day, Indian Railways moves 18 million passengers and 2 million tons of freight. Indian Railways owns 8,300 locomotives, 45,000 passenger coaches, and 225,00 freight cars. It is one of the largest railroads in the world, and in 2004 Indian Railways was running full speed towards bankruptcy; it was called a "white elephant," and many thought it should be privatized.
What happened after 2004 was something of a miracle (the miracle of competency), Lalu Prasad Yadav, a politician from a rural district was named Railway Minister and in a very short span of time, he turned the railways into a profitable enterprise. There was no privatization (though there are joint ventures), there were no layoffs, and nobody was cut from the pension rolls. It wasn't a fluke: Indian Railways has turned a profit every year since 2004. Lately, delegations from famous business schools like Harvard and Wharton, have come calling. It seems the whole world wants to know how Lalu (sometimes spelled Laloo) pulled off such a turnaround.
According to Insead (see video), "It's a strategy based on volume. While output has increased threefold, real operating costs have fallen over the last 25 years. By increasing the capacity of a typical long-distance train to 2000 passengers from 800, unit costs fell by 45 per cent. The practice of taking seven days to load or unload a freight train was reduced to five, and systematic changes have helped to rein in corruption. Garib rath trains, also known as the 'poor man's chariot', now have air-conditioning with cushioned seats and suction toilets."
Lalu has not been without his detractors and his political life has seen its share of controversy, most notably the "fodder scam," but his tenure as railway minister seems entirely on the up and up. He also has a huge number of fans throughout India. His populist politics, colorful personality, and success with the railways keeps him in the limelight, a place he seems to enjoy very much. Just today, he flagged off the first train to run in India's Kashmir valley.
What's next for Lalu Prasad Yadav? Could he move to a higher office, perhaps Prime Minister? I don't really know. But I hope he stays with the railways, there's still work to be done and I don't know who else could do it as well - or at all.
