Chidambaram had reportedly said that Lalu Prasad could initiate the privatisation of railways by handing over charge of goods trains and small distance passenger trains to private parties.

"There is no question of privatisation of railways. Chidambaram's statement was misquoted by a section of the media," the railway minister told reporters late Thursday.

He reiterated that there was no chance of privatising the railways as long as he remained railway minister. He added that there was no need to hand over profit-making public sector units to private hands.

The minister said Indian Railways was doing very well with a target of netting a profit of Rs.200 billion during the current fiscal. He claimed the railways would soon leave the country's top public sector unit Oil and Natural Gas Corporation (ONGC) behind in profits.

Lalu Prasad is credited with turning around the fortunes of Indian Railways, one of the largest transport systems in the world, which ended fiscal 2005-06 with a healthy cash reserve of Rs 110 billion.

He, however, said the turnaround was made possible with the help of thousands of people employed in the railways across the country.

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Maverick politician becomes India's top railway reformer

The Financial Times: 09/30/2006
By Jo Johnson
 
New Delhi: Lalu Prasad Yadav, India's most notorious politician, is undergoing an unexpected transformation. A man blamed for bringing "jungle raj" to the impoverished and lawless north Indian state of Bihar (Pakistan can have Kashmir so long as it takes Bihar too, one joke goes), has suddenly become the toast of reformers for his surprising success in overhauling the Indian railway system.

"The same network that an expert group declared in July 2001 to be on the edge of 'fatal bankruptcy' and stuck in a 'terminal debt trap' is now the second largest cash generator in the public sector," Yadav says in an interview.

Lalu as India's best-known low-caste politician is invariably known has traditionally been a figure of fun for the urban elite. though he leads the second largest party in the United Progressive Alliance (IPA) coalition, the Rashtriya Janata Dal.

Just shy of his 60th birthday, he hams up his origins as a son of the soil, allows black hair to sprout in bushy clumps from his ears and always wears a dhoti, the tunic worn by villagers. Cartoonists oblige by depicting the farmer-politician as a rural buffoon.

"As long as there's aloo [potato] in your samosa, there'll be Lalu in Bihar", was long his catchphrase. But his 15-year rule came to an abrupt end in 2005 amid accusations he had turned Bihar, one of the most efficiently administered states when India gained independence, into a byword for official corruption and economic despair. His extraordinary 30-year political career seemed all but over.

When Lalu took over the railways in 2004, India, with its massive infrastructure deficit, seemed to be blowing its chance of integrating with global supply chains. Today, it is a different story. He is ranked the government's second best minister by India Today.

New persona

Lalu last week took on a new public persona as a management guru and turnaround artist, wowing students in a televised seminar at the Indian Institute of Management in Ahmedabad (IIM-A).

"This is just the trailer," says Sudhir Kumar, Lalu's right-hand man in the ministry. "The film is about to start." This year, Kumar says, the ratio of operating expenses to revenues will fall to 78 per cent from 84 per cent last year and 107 per cent in 2001, thanks to straightforward measures that have radically improved utilisation of existing resources.

Students at the elite IIM-A, which has included a case study on the "turnaround story" in its postgraduate curriculum, said they were dazzled by Lalu's charm and dhoti management approach.

Reforming a network that employs 1.4m people, and whose trains travel seven times the distance from earth to the moon every day, was more a function of "common sense" than management "miracle", he told them.

The Lalu recipe is a bold play on volumes. Lalu has avoided the political suicide of raising passenger fares, opting instead to reduce them to achieve better occupancy rates, while lowering marginal unit costs by lengthening trains.

Exit, too, Bradshaw, the legendary timetable laid down by the British: Lalu wants his trains soon to run at an exhilarating 100km/h, twice today's stately chunter.

On the freight side of the business, which accounts for 70 per cent of the network's revenues and all its profits, Lalu has introduced round-the-clock loading that has reduced train turnaround times from seven to five days and increased the network's loading capacity by 25 per cent.

Doubters too

Some still have their doubts, pointing out that under his rule Bihar's police, for example, had been so neglected they even lacked the ink and paper to register cases.

"This man was master of Bihar for 15 years, a state begging for basic governance, and he let it down badly. Now, we are told, he's turned around something as complex as Indian Railways in barely two years?" sniffed an editorial in the Financial Express.

Sceptics point to his irrepressible populism, evident in his decision to introduce earthenware cups instead of plastic ones on trains.

Plain talk

By and large, though, a department with a massive procurement budget has so far been free from the corruption scandals that blighted his record in Bihar.

Mahesh Rangarajan, a political analyst, says the urban elites underestimate Lalu at their peril: "The buffoon act in Bihar was Lalu speaking in the idiom of rural lower castes: it was political theatre from a sharp politician with a master's in political science. Lalu wants to be prime minister one day and is showing the business community he's a man they can do business with. Railways are a logical place to start."