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Dear Vivek,

Technically all depts of Indian Railways can be outsourced.

Merely stating that your intentions are beyond departmentalism is not enough. You need to demonstrate it every where in your post. Para 3 of your post clearly shows your departmental feelings.

After administering an outsourced maintenance first hand as a contractor I would like to caution you on your notion of cost saving. Your notion is based on the premise that the outsourced contractor will pay pittance to workers and supervisory staff and carry out same work load with less no. of manpower and will in the long run be cheaper to you. This may be true in U S of A where when you outsource to India the salary pay out difference is such that even with more staff you end up paying less. Also the quality and productivity is more(not neccessarily together). But in India the same logic will fail. Because the salary difference will not be much(I am not talking of a Dhoti wala contractor but a proper Engineering contractor). The risks involved will be priced for (including the insurance premium). Working methodologies will be tuned towards less cumbersome and tedious methods(for e.g. when we do a motorised trolley inspection the trolley returns back to base depot by a road lorry) costing you more money in comparison to what you spend now.

Outsourcing is typically suitable for routine repetitive jobs requiring a fixed level of skill, manpower and equipment resources from the contractors and does not need day to day decision making. Or a high skill job for which you do not have enough expertise or the volume is not enough for you to economise. Reservation office is a prime example(repetitive). Then loco and wagon maintenance is also an ideal activity(confined activity with standard parts and works). Issuing cheques is another area(low skill, repetitive). security manning is also a very established area for outsourcing(low skill manning).

Then you also have to weigh the existing expertise available in the market to start outsourcing. Which in track maintenance is currently not there (but definitely can be developed easily and hence should'nt be a reason not to outsource). Still you won't be able to write off a PWI, AEN and DEN with outsourcing. Are they not working currently as an ousourced department. They maintain track for you(or your operations) to run the trains and in turn get paid.

I don't find anything wrong in 60% figure. Why you are so worried about this figure and whats the other % you are looking forward to achieve. The cost of maintenance will be largely in proportion to the cost of asset and its rate of wear and tear. For example the rails get worn out more due to static and dynamic loading but a well foundation will be mostly maintenance free, same goes for rebars inside concrete. In all structures the exposed interfaces need higher level of maintenance which is in general true in nature also.

Board has already allowed Project Management Consultants on construction project which is in a way outsourcing of Engg. construction dept. I believe they should do so in openline also, especially on new lines where you have no neccessity to carry the old baggage.

But I'll advise you to check history of British Rail (easily available on internet) and find yourself how good are your beliefs. Their tryst with your kind of ideas was a big fiasco. They also thought P Way maintenance is routine but it turned out to be not so. They reverted back to what they had before 1993 in 2005 and now accept that they paid heavy price for privatisation (they did'nt call it outsourcing as it appears to be a word of recent popularity).
Check this:
en.wikipedia.org/wiki/Pri...itish_Rail

I am not sure whether you are aware of BRB happenings or not, but i'll request you to read through the link and then comment.

PS: In US of A they even outsource marshaling activity by sending a rake to a yard owner and getting the sorted rake out as per their required formation. Thats why I said there is practically no limit to outsourcing. You can hire a management consultant(read outsource) and ask them to advise you on what to outsource. To sum up you can outsource outsourcing itself.

Dear Subbu,

And what makes you believe that this 60% is inefficient.

Read again I am in favour of outsourcing but not for the same reason as yours or Vivek's. Your thinking that there would be more professionalism and optimisation by privatisation (i read this as better managed in general) is quite right but not because the outsourced agency will be more capable than what you have now (inhouse). It will be because of the absense of bureaucracy in execution of works which blunts the peformance today. With full privatisation the operators(whoever feel they are the real operators) will no longer be committing sins of ignoring maintenance blocks and roaming scot free. The private Maintainer (rather the outsourced Maintainer) would charge you a handsome figure for idling(akin to your CD & MD for Traction Power supply). Also with outsourcing you will no longer be able to play around with depriciation figures. The figures will have to be appropriately reflected in accountals and investments made as per age and usage of asset (against your current practice of following whims and fancies of whoever). Cos if you dont do that the rates quoted for maintenance will zoom up for you to see before the award of work.. The same thing if a poor engineer tells you today in his preventive maintenance works estimates you won't believe.

And what works are not known and listed today which can be listed when we outsource.

I perfectly agree that with full outsourcing there will be all around advantage to us in terms of cost, quality, efficiency etc. NOT because of increased professionalism and optimisation, but because of reduction in bureaucracy, interference, obstructions in day to day working, absence of kinky and conflicting rules and regulations etc.

A person like me would prefer to become an entrepreneur in an outsourced environment and provide you with best maintenance services at possibly lower cost with more automation and streamlined process. But all this because I can't do the same thing now remaining inside. The whole set up is frozen in time and legacy, there are barriers to change due to petty vested interests or for no reason at all (over dependence on precedence). There is no platform to implement new technology/ innovation in day to day working on an organisational scale. All this struggle will not be there if I do the same thing for you from outside. I will no longer be required to take tedious approvals for bringing in new tools and methodology. As a turnkey maintenance contractor I would not go for the lowest offer (that too sealed!... so that others can not match it and remain higher than the lowest....wow what a rule.. and thats why can not fax lest others know the lowest rate and match it with theirs) and suffer. Instead I'll reward good contractors with an annual target business growth MOU with committed inputs on critical resources (thats how its done in business) and volume discounts (after getting the works as lowest offerer from you!). Also I wont mind publicising the lowest offers already recieved (even before close of offer) for others to either compete and reduce or atleast prewarn them of their fate and save their time and money on quoting. And also I'll allow anyone to revise price if its advantageous to me.

Lets go for it for whatever reasons because both of us see benefits out of it.

Dear Ananth,

Your worries on water supply is a bit beyond reason. Same goes for your views on P Way works. It looks like whatever scares you is an important work and others are non important and can be outsourced. Maintenance of water supply should be the most easiest to outsource as the work only involves manning the equipments and doing repairs, and it will also solve your problem of difficult to manage interface between civil and electrical.

After reading what you wrote about your experiences with outsourcing of colony maintenance, I am confused as to how on earth you call it as outsourcing. Its plain contracting on itemised work instructions which is very distinct from outsourcing where the decision to do what will also be left to the maintainer and only the performance (in terms of attendance to complaints, failure rate etc.) will be monitored.

I am afraid if you call a zonal works contract outsourcing then we are talking on different platforms altogether.

Your requirement of cushion can be easily taken care of by having a day work arrangement for exigencies and hence should not be an issue for outsourcing.

You are right in pointing out that in the current arrangement we have less supervisors to manage contract works. But yours will be a lone voice like mine in this impressionable world. Since every expert from our Rakesh to WB's (forgot the name) has declared that we are overstaffed, we have started looking at each other also as redundant and unneccessary.

Let me take you back in the (they say 'good' but I doubt) olden days. Not long ago Engg dept used to employ workers on daily wages as per need and charge the wages to rev or work estimates(ask your bada babu whats TLR and he'll explain). No contractor was involved. Somewhere somebody decided to abolish the system (to comply with labour laws and not to favour contractors) and the labour contract system was born(at least in open line). You can still check some old files as to how the CTR estimates were made in those days, they were all in terms of mandays required for the works. The AEN (or was it PWI?) was empowered to recruit the requisite no. of labours from the adjoining villages and the work was carried out to the satisfaction of the Engineer who was also the recruiter. This system of contracting labour portion of work is something forced on the Engineers since then.

Even today in remote areas the best way to execute P Way works with quality will be to recruit daily wages labours and get the works done. All this contracting business in P Way is going on because we want to pay handsome salary to our staff for eternity as an ideal direct employer and are restrained to give temp. employment. We resort to contracting out the labour portion of works to a contractor who can provide us with cheap temp. labours (at times paying them even less than the min. wages).

The system of contracting was designed as an addendum to our style of working accomodating the changed requirement of taking workers from contractors, instead of a customised contracting solution. You need to see the present contracts in this perspective, they are no more than a glorifed disguised labour supply contracts(and we are not alone here all other Govt. public works depts. are similarly placed).

Outsourcing will be the proper way of contracting out the works and if you can ensure a contractor with good quality compliance credentials then the results will be there to see for every one. For example an ideal P Way maintenance cntract for a section will be based on maintenance cost per unit km per month with fixed overheads along with commitment to retain minimum no. of critical resources. The measurement will be in terms of track quality, failure rate, proof of carrying out standard scheduled works etc. Offcourse on a run down track the parameter can also be in terms of reduction in failure rate within a given time frame etc. The works will include inspections and identification of works by the contractor's engineer.

We are doing it here for our clients and are getting paid on monthly progress percentage basis. I believe it can be successfully implemented else where also. There are clauses in contract by which we are bound to respond in a predetermined manner to emergencies and its working well to everybody's satisfaction. Offcourse any missed line block is compensated and if we exceed there are penalties.

PS dear Vivek, I only disliked the 60% connotation (its like blaming a loin for being bigger than a mouse which he can't help). But I do like the idea of outsourcing for slightly different reasons than yours.