Economics of Safety on Railway Safety

It has been increasingly recognized that safety related aspects of operations on the Indian Railways have not been given the priority and critical attention that is required for ahuge organization of its type which handles a huge network in terms of passenger and freight movements. Despite recommendations of High-level Committees on Safety appointed by the Government from time to time, inadequate provisions to the Depreciation Reserve Fund for renewals and replacement has been a persistent and disturbing feature. While such inadequate allocations can endanger safety considerations, what is not easy to understand is the continued absence of safety related investments required for operations especially given the significant returns that can result from the resulting improvements in railway operations and thereby revenue generation. Our case studies in this context, as reported in the present paper, reveal this feature clearly. Further, in an indirect way, the absence of inadequate and timely investments for expansion, for example, on the railways to take care of huge emerging requirements can lead to misallocation of resources which results in losses to the organization due to loss of traffic to the highways.