Assignment On

Long term Planning Problem in Public Sector Of Bangladesh

(A case study on Bangladesh Railway)

Course code: ACTCourse Title: Managerial Accounting

Submitted toMr. Iehit Sharma

LectureDepartment of Business Administration

Leading University

Submitted by

Name IDFaglul Karim Raihan 1001010142Md.Ahadujjaman 1001010131Gulam Sarwar 1001010060Ashfaqur Rahman 1001010141Adbul Aziz 1001010127

Sec-C, 24th batch

Department of Business AdministrationLeading University, Sylhet

Date of Submission: March 6, 2012

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Table of Contents

Serial No Content Name Page No

1 Introduction

1.1 Background 1-2

1.2 Objectives of the Study 2

1.3 Scope of the Study 2

1.4 Limitations of the Study 2

1.5 Methodology of the Study 3

2 Operational Definitions 3-4

3 Bangladesh Railway at a glance

4-5

4 Few Long-Term Plans of government for Railways sector

5-7

5 Problens of Long Term Planning

7-9

6 Recommendation 10

7 References 10

Acknowledgement

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First of all we pay a special thanks to our almighty God, who made us able to complete this

assignment. Then I would like to give thanks to Renowned Philanthropist Mr.Ragib Ali as he

established Leading University and we got this opportunity to read here. After wards, we would

like to express our heartfelt gratitude to Prof. Dr. Mr. Bashir Ahmed Bhuiyan, Head of the

Department of Business Administration, Leading University-Sylhet.

We would like to thanks our course instructor Mr. Iehit Sharma, respected lecturer of Leading

University for giving us this chance to make a assignment on “Marketing plan”. Our thanks also

goes to our family members and friends who are co-operated with us at any of the steps of the

assignment and continuously support us without any hesitation and make themselves an

important part of this job

1. Introduction 1.1 Background:

  

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Exercise aimed at formulating a long-term plan, to meet future needs estimated usually by

extrapolation of present or known needs. It begins with the current status and charts out a path to

the projected status, and generally includes short-term (operational or tactical plans) for

achieving interim goals. Planning is also very much important for government sector. Railway is

one of important government sector. Railway organizations worldwide have traditionally

evolved as vertically integrated transport operating enterprises under public ownership and

control. To the extent that they have been sheltered from competition by government regulatory

controls, they have been able to grow to dominant positions in the domestic transportation

activity of many countries, both within and outside of the Asia-Pacific region.

Bangladesh Railway at present has got 2855 route kilometers. It required sustained efforts for

over a century to build the network .The story dates back to 1862, when the first section of 53.11

kilometers of board gauge line was opened for traffic on 15th November that year between

Darsana and Jagati. The next railway connection opened to traffic was between Dhaka and

Narayangonj, a distance of 14.98 kilometers on 4th January 1885. Then gradually, these rail lines

were extended and new sections constructed to cover more areas. In 1891, the construction of

then Assam-Bengal Railway was taken up with British Government assistance but that was later

on taken over by the Assam-Bengal Railway Company.On 1st July 1895, two sections of meter

gauge lines were opened between Chittagong and Comilla, a length of 149.89 kilometers and

between Laksam and Cahndpur, a length of 50.89 kilometers.

Railway Companies formed in England took up the construction and operation of these sections

in middle and late 19th century. Their primary objective was to operate these sections purely

commercial considerations. But later on when various sections were liked up, the British

Government of India found them very important for their strategic, political and economic points

of views and therefore, the Government also came in the picture with statutory control and

regulations for operation and management of the Railway.

On 1st January 1942, the Assam –Bengal Railway was amalgamated with the Eastern Bengal

Railway under the name “Bengal and Assam Railway .At time of the partition of India in 1947,

Bengal-Assam Railway was split up and the portion of the system, about 2,603.92 kilometers

long which fell within the boundary of erstwhile East Pakistan was named as Eastern Bengal

Railway, the control remaining with the central Government of Pakistan Later with the effect

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from 1st February 1961, Eastern Bengal Railway was renamed as Pakistan Railway. Then in the

year 1962, the control of Pakistan Eastern Railway was transferred from the Central Government

to the Government of then East Pakistan and placed under the management of a Railway Board

with the effect from the financial year 1962-63 by the presidential Order of 9th June 1962.

At the end of 1996-97, Bangladesh Railway had a total of 459 numbers of stations, 241 in

Eastern Zone and 218 in the Western Zone, spread over 2768 route kilometers of tracks

consisting of two gauges ,viz, Broad Gauge (1676mm) of 914kilometers in the Western Zone

only and Meter Gauge (1000mm) of 1296 kilometers and 558 kilometers on the East Zone and

the west Zone respectively. In 1996-97, it owned a fleet of 284 locomotives, 1,245 passengers

carriages, 152 other coaching vehicle and 1,2948 units of freight wagons, but effectively

availability for services was much less.

1.2 Objectives of the Study The specific objective of this study is to address various long term planning issues of Bangladesh

Railway. The broad objectives are to analyze and indentify the problems in long term planning in

public sector of Bangladesh.

1.3 Scope of the Study

The scope of the study is limited to the issues related to the long term planning program study of

Bangladesh Railway. The report will focus only on the long term planning Bangladesh Railway

with an emphasis of bangladesh Railway as a government sector.

1.4 Limitations of the Study Due to time constraints, the study has been conducted only on long term planning issues of

Bangladesh Railway based on secondary information. A macroscopic analysis (aggregate

analysis) has been made here for the unavailability of appropriate data in some cases. To prepare

this assignment we have faced a lot of problems such as unavailability of lab, electricity

problem, unavailability of related books, lack of time, unavailability of information in net etc.For

more accurate analysis, further detail studies are required.

1.5 Methodology of the Study

1.5.1 Type of Study

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The study is mainly a qualitative research, which involves analyzing of some important

information of railway transportation and long term planning effect of Bangladesh Railway and

finally suggesting some recommendation for Bangladesh Railway to remove problem in long

term planning.

1.5.2 Source of Data

The information used in this assignment is based on secondary source, which is mainly collected

from Bangladesh Railway, Planning Commission, Ministry of Communication, Bangladesh

Bureau of Statistics and Internet. Some other statistical data are collected from different

published booklets and transport journals.

2. Operational Definitions:

Planning: A scheme, program, or method worked out beforehand for the accomplishment of an

objective. Planning in organizations and public policy is both the organizational process of

creating and maintaining a plan; and the psychological process of thinking about the activities

required to create a desired goal on some scale. As such, it is a fundamental property of

intelligent behavior. This thought process is essential to the creation and refinement of a plan, or

integration of it with other plans, that is, it combines forecasting of developments with the

preparation of scenarios of how to react to them. An important, albeit often ignored aspect of

planning, is the relationship it holds with forecasting. Forecasting can be described as predicting

what the future will look like, whereas planning predicts what the future should look like.

The term is also used for describing the formal procedures used in such an endeavor, such as the

creation of documents, diagrams, or meetings to discuss the important issues to be addressed, the

objectives to be met, and the strategy to be followed. Beyond this, planning has a different

meaning depending on the political or economic context in which it is used.

Two attitudes to planning need to be held in tension: on the one hand we need to be prepared for

what may lie ahead, which may mean contingencies and flexible processes. On the other hand,

our future is shaped by consequences of our own planning and actions.

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Long Term Planning: In general, a plan with a planning horizon of five years or more. Also

called long Range plan.

Government Sector: The part of the economy concerned with providing basic government

services. The composition of the Government sector varies by country, but in most countries the

government sector includes such services as the police, military, public roads, public transit,

primary education and healthcare for the poor. The government sector might provide services

that non-payer cannot be excluded from (such as street lighting), services which benefit all of

society rather than just the individual who uses the service (such as public education), and

services that encourage equal opportunity.

3. Bangladesh Railway at a glance

Bangladesh railway, covering a length of 2854.96 route kilometers, managed by about 34,168

regular staffs, is the Government-owned and Government-managed largest transportation agency

of the country. Due to truncation from the main system of the then British India rail network, BR

is handicapped to serve the country effectively and efficiently without proper re-orientation and

development. Since the birth of Bangladesh in 1971, instead of constructing new railway lines,

some of the branch line railway sections were declared redundant and subsequently closed and

no proper attention to maintain the existing assets was being given.

Since its journey on November 15, 1862, BR has passed a glorious past. The historical events of

Bangladesh Railway are briefly presented at the end of this report (in appendix: A-1). As railway

is a very important mode of inland transport, linking the entire length and breadth of the country,

it’s healthy grow naturally contributes to the economic development of the country.

Bangladesh Railway covers 44 civil districts of the country. The rail-route is composed of MG &

DG (with a combination of DG in some sections) tracks. East Zone has 1,302 route kilometers of

MG track only and West Zone has 533 route kilometers of MG, 660 route kilometers of BG and

365 route kilometers of DG track. The total length of running track including track on double

line, in the yards and sidings is 4,442.95 kilometers. The railway network is shown in figure A-1

in the appendix.

Presently, Railway is under the Ministry of Communication and entrusted with Director General

(DG) drawn from the Railway professionals. It is bifurcated into two zones, East & West, under

the administrative control of two General Managers, who are responsible accountable to the DG

of BR.

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For policy guidance, a 9(nine) member Bangladesh Railway Authority (BRA) has been formed

with the Minster of Communications as its Chairman. The Director General is assisted by in

Additional Director General and second Joint Directors Generals. The General Managers of the

two zones are assisted by various specialized departments who are responsible for operation,

maintenance and financial management. Each zone is again divided in two divisions, which form

the basic unit of operation. The schematic organogram of BR is shown in the appendix (A-2).

The net operating revenue without considering the effect of PSO and Welfare Grant of BR for

the year 2003-04 amounted to Tk. 2,452.36 million (Tk. 1,418.27 million considering the effect

of PSO and Welfare Grant). The operating ratio was 128.5% in 2003-04 considering the effect of

PSO and Welfare Grant.

4. Few Long-Term Plans of government for Railways sector:

4.1. Bangladesh Metro Rail Project

From the time the British introduced railway transportation in the subcontinent, trains have been

a cheap, mostly safe and fairly rapid means of transportation. Different environmental

organizations on demanded concerted and long-term plans with adequate budgetary allocations

for making railways the safe, cost-effective and environment-friendly mode of transport. They

appreciated the government decision for making Bangladesh Railway a separate ministry and

said it is the first step towards converting the railways the main mode of transport. The

environmentalists were addressing a joint rally in front of National Press Club.

For quite some time, the country’s railways did not see any development due to government’s

negligence and the prescription of credit-providing agencies. As such, making the Bangladesh

Railway a separate ministry is an important initiative towards the expansion of the railway

network and improving technically the locomotives and the train carriages. There must now be

well-thought out plans and concerted efforts to make the sector vibrant. The country’s railways

and river routes have been neglected while the roads and highways in the country were being

developed for superior road communication .It is now time that cheaper and safer travel on trains

which can be made environment–friendly is organs for our citizens, and also the daily

commuters. The railway ministry will require adequate budgetary allocations as it has emerged

as an independent ministry. Despite limitations, trains are increasingly getting popular in the

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country as a relatively safer and cheaper alternative. Passengers prefer train journey due to

distressful and costlier bus services and above all, there is more risk in bus journey than in trains.

Frequent road crashes and growing traffic jams on roads and highways have virtually shifted the

passengers towards railway and people are eagerly looking forward to train travel. Moreover

trains are less damaging to the environment as modern locomotives emit less carbon. This is

another strong point in favour of expansion of railways. Also in the near future metro-rail and

electric train services in the country and within Dhaka and other cite will be emission-free and

fast, safe and cheap means of travel.

4.2 E-tickets System:

Bangladesh Railway is going to launch electronic ticketing service to ease the sufferings of

passengers. Prime Minister Sheikh Hasina on April 2, 2010 unveiled the service at the Railway

stall in the Digital Innovation Fair at Bangabandhu Sheikh Mujibur Rahman Novo Theatre in the

capital. Using Grameenphone's "Mobitaka" service, rail passengers will be able to book or

purchase electronic railway tickets 10 days prior to their travel using mobile phones. To buy an

e-ticket a customer will have to press *133# in his mobile phone and enter a menu.

4.3 Dhaka seeks train to Delhi:

Bangladesh wants the Dhaka-Calcutta train service to be extended to other Indian cities,

including Delhi and Ajmer, and has stressed that Mamata Banerjee had been keen on the plan

as railway minister.India and Bangladesh to agree to at least two more cities which will be

connected by rail. Right now, it’s just a Calcutta-Dhaka service, a service which connects

Bangladesh with India, With the Dhaka-Calcutta service already in place, India is now working

to link Bangladesh with neighboring Tripura. The long-term plan is to start trains from

Bangladesh to various destinations in India, including New Delhi and the Sufi pilgrim town of

Ajmer. The train plan is part of a larger sub-regional pact Dhaka wants to sign for better road

and rail connectivity, power grid and water-sharing with India, Nepal and Bhutan. It has been

flagged as “the key issue” in Prime Minister Singh’s planned talks There is rethinking on the

whole paradigm of regional co-operation which will encompass India, Bangladesh, Nepal,

Bhutan and the eastern parts of south Asia.

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5. Problens of Long Term Planning

5.1 Lack of Coordination:

Bangladesh railway is a large organization comprising of two zones- East & West, divided by

the river Jamuna, under the administrative control of two GMs who are accountable to DG. Each

zone is further divided into a numbers of divisions under the control of Divisional Railway

Managers (DRMs) in association of different Departmental Heads & subordinates. This large

Amalgamation frequently creates Coordination problem In the railway services, the Railway

cadre is composed of two BCS cadres: BCS (Railway Engineering) and BCS (Transportation &

Commercial). The Engineering Cadres are composed of 5 sub-cadres: Civil, Mechanical, Signal

& Telecom, Electrical and Stores. All day-to-day operation and maintenance of BR are

performed as a concerted effort of these different Departments. Besides, a strong Audit &

Accounts Department (BCS Audit and Accounts Cadre) is responsible for keeping railway

accounts. Moreover, RNB (Railway Nirapapatta Bahini) in addition of Railway Police, Medical

Department etc. are to help in BR’s operation. Due to the combination of large number of

departments, there is always a possibility of internal clash on different issues.

5.2 Managerial Problems:

Bangladesh Railway management system is under experiment for a long time. Till June 2, 1982,

the management and development of railway was vested with a Railway Board, comprising of a

Chairman and four members. But, for administrative convenience and operational reason the

Railway Board was abolished with effect from June 3, 1982 and the function of the Railway

Board was vested with the Railway Division of the Ministry of Communications with the

Secretary of the Division working of as the Director General of Bangladesh Railway. For the

same purpose the Railway bifurcated into two zones, East & West, under the administrative

control of two General Managers (GMs), who are responsible/ accountable to the Director

General (DG) of Bangladesh Railway. Subsequently on August 12, 1995, Railway was separated

from the Ministry and entrusted with Director General drawn from the Railway professionals.

For policy guidance, a 9 (nine) member Bangladesh Railway Authority (BRA) was formed with

the Minster of Communications as its Chairman. The Director General is assisted by in

Additional Director Generals and second Joint Directors Generals. Frankly speaking, the DG

holds little control over different activities especially related to planning & policy formulation.

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This creates operational as well as planning and development problems. For this reason,

restructuring of BR i.e. organizational reform is very much necessary to develop efficient and

active management system.

5.3 Lack of Govt. Attention:

Bangladesh Railway is a neglected sector for a long period. No Government of Bangladesh has

patronized this thrust sector properly for unknown reasons. Road infrastructure has developed

tremendously for huge invest during the last decades. On the other hand, negligible allocation of

resources to rail sector compared to roads has led to paralyze the rail transportation system of the

country year after year. No remarkable project/program has been taken to develop and strengthen

the railway network; on the contrary, existing railway infrastructures cannot be properly

maintained due to lack of resource. As a result, railways are always at a disadvantage compared

to road transport.

5.4 Lack of Modernization & Development:

The expansion of BR has been blocked since 1947. Only 80 kms rail line has been constructed

for last 50 years. On the other hand, more than 1200 kms rail lines are under risk for operation

due to lack of proper maintenance and attention which is mainly for insufficient fund allocation.

As a result, derailment has become common. This has adverse impact on the efficiency and

reliability of railway services. On of the major problems, presently faced by the Bangladesh

Railways is a serious shortage of locomotives and route capacity. Far from having insufficient

traffic on its trunk routes, the BR suffers an excess of traffic in relation to the capacity of these

routes. Operating priority on these routes is given to passenger trains, and freight trains incur

major delays and frequent cancellations as a result. Although huge development budget has been

allocated for Communication sector especially for roads & highways sector, little attention has

been given to rail sector. Thus BR was forced to face the uneven competition with other modes

of transport. So it is a challenge for BR to eliminate the inherited structural and physical

weakness of Bangladesh Railway.

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6. Recommendation

1. Bangladesh Railway should commercialise some of the service operations and introduce a new

market-based pricing system. Its routes and services need to be integrated with other surface

modes to make the railway more attractive to the users.

2. The on-going reforms and reorganization of BR should be completed for transforming the

organization into a corporate entity. Infrastructure and operation need to be segregated and both

operated on commercial principles. Whatever reform has been achieved so far should be

consolidated by bringing the changes under the legal coverage.

3. Bangladesh railway should provide the backbone of intercity, intra-city passenger transit and

commuter service. Further areas of railway operations should be opened up to private sector

involvement.

4. Dualization of railway should be extended from Dhaka to Chittagong to facilitate regional

integration, and provide uninterrupted broad guage rail service from Rauxal (in Nepal) to

Chittagong in Bangladesh. In addition, there is a need to standardize coupling and braking

system, as these restrict operating speeds for Indian trains hauling Bangladeshi wagons.

7. References:

www.Google.com

WWW.Wikipedia.Com

WWW.oppapers.com

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