Railways to hire audit firm to rationalize staff strength

NEW DELHI: The railways has taken the first step in its bold decision to rationalize staff strength with the state-run transporter shortlisting four private audit companies to initiate the move.

One of the four private companies shortlisted by the state-run transporter -- Ernst and Young, Deloitte, PWC and KPMG - will be hired for the task.

Member (staff) of railway board Pradeep Kumar said an HR audit company would be identified to study the entire gazetted staff strength.

He said the company will examine the railways' manpower given the technological development/changes in operational and maintenance practices and suggest optimal level of the staff strength needed in coming years.

Several independent committees have noted that staff cost (including pension) is the single most significant expenditure item for the railways, accounting for the lion's share of total expenditure and have suggested rationalizing the number of employees.

As of now, the transporter is the biggest public employer with 13.36 lakh workers on its payroll.

It was found that spending on staff was unmanageably high and growing at an alarming rate as staff costs constituted 48% of ordinary working expenses and 34% of gross traffic receipts in 2013-14.

Railways over the years has become overly centralized, top heavy and hierarchical organization which is suffering from 'departmentalism'.

Bibek Debroy panel suggested for immediate intervention to right-size the railways' bench strength which is eating up cash-strapped transporter's resources.

The committee, in its report, noted that the present railway board is saddled with excess manpower with total staff strength of 1,107 officers.

It noted that there are seven members, two director generals (DG, health and DG, RPF), one secretary, 16 additional members, 21 advisors, 94 executive directors, 200 directors/JDs, 250 DDs/USs and 516 section officers.

"The employee costs including pension constitute the single largest component of railways, which has further become unmanageable after the sixth pay commission. The seventh pay commission in 2016 would further push up staff costs and pension costs which will have serious financial implications for railways," it noted.

"Thus there is an urgent need to rationalize the manpower," said the panel.

Kumar said, "Railways will also hire a reputed consultant to examine the strength in non-gazetted section to study the system and requirement and see if there is any extra flab."

The railways will also take into account international benchmarks before deciding on the issue, he added.