Sri Lanka Railways (SLR) has deteriorated so much due to politicization in the decision-making process that according to 2008 figures, recurrent expenditure was a staggering Rs 8 billion while total revenue was below Rs 2 billion with the situation worsening in 2009 and 2010, according to a SLR engineer.
These remarks were made by Keerthi K Hewavithana, Engineer Headquarters, SLR making the D B Rampala Memorial Lecture 2010 – 100th Birth Anniversary held in Colombo recently. He was speaking on “Successful Turnaround of Indian Railways (IR) and lessons Relevant for Sri Lanka Railways”.
He said that if SLR is provided with the correct political leadership it could as in the case of Indian Railways be turned around and would then be empowered just like IR. Also if SLR is allowed to make decisions based on scientific and business fundamenals, then this cuntry will surprise the world through a faster than expected turnaround, he added.
Mr Hewavithana said that the other critical problems faced by SLR are losing its market share in the profitable freight business; lack of flexibility in pricing and unrealistic pricing methods; high cost of internally sourced products and services; investment in projects that do not yield a return; operating expenses much higher than gross revenue (greater than 100% operating ratio) and lack of market orientation.
He said the SLR has efficiency and capabilities such as when it repaired and restored the coastal lines, bridges and signal systems in record time after the tsunami and put trains on track on full steam with the assistance of other state engineering institutions.
Mr Hewavithana pointed out that this was completed by SLR at a fraction of the estimates given by foreign companies and the time taken was only a few months compared to years that were required by foreign companies. However he noted, “unfortunately our hopes for a SLR turnaround were only shortlived.”
He said that the current economic growth could provide a buoyancy for the transport sector in Sri Lanka and the operations could be compared to one of the 16 zones in IR and SLR could be modeled accordingly in a profitable manner.
He said that SLR has a strong asset base that could be developed through public-private partnerships (PPP) and outsourcing could be introduced just like IR to replace internal products and services that are loss makers. Long haul lines could be operated in a more productive manner and round the clock. SLR could attract freight with a network of storage facilities and a cold chain and the increase in the tourist arrivals could provide a greater opportunity.
Mr Hewavithana said that the railway is two to five times efficient and electrification would create greater synergies and make travel greener and healthier. Further the railway uses two to three times less land mass for each passenger transported and saves previous urban and cleared land.
He said that SLR could be used to a great advantage in the economic boom if they could convert abilities into capabilities; knowledge and experience into tangible results, to followers to become leaders; weaknesses into strengths and threats into opportuities that would put Sri Lankan railways into a sustainable public utility.