Thursday, February 2, 2012

China's push for rail reform could be dead in its tracks

BEIJING: When Zhang Dong sat down recently to book train tickets for his trip home for the Chinese new year, he got a taste of the frustration that has helped make China's railway ministry a focus of anger against the country's many bureaucrats.


The ministry's touted web-based ticket booking system was supposed to replace the antiquated ordeal of waiting in long queues. It didn't. The system crashed minutes after its launch before the annual holiday migration of 200 million people by rail, and proved as frustrating as any line-up at a station.

"That online system was awful. I spent all night trying to get a ticket," said Zhang, a 26-year-old medical student from central China, towing his suitcase over a bridge toward the busy West Beijing train station days before the lunar new year.

The online fiasco, which spurred a barrage of criticism, was the latest in a litany of troubles for the ministry, which has been plagued by scandals and missteps. Some of those problems have been deadly, including a July crash of a new high-speed train that killed 40 people.

But for decades the Ministry of Railways has proven impervious to reform efforts, fending off attempts by leaders to merge it with other ministries or close a separate court system run by the 2.1 million-employee ministry.

A growing chorus of economists and policy-advisers have said the ruling Communist Party must take on "entrenched" interests, ministries resisting reforms and state-owned businesses enjoying quasi-monopolies, to unleash a new cycle of market growth and job creation.

Some officials have hinted they could take on that job, while senior leaders have been coy.

As the example of the rail ministry shows, it's far from clear whether the Communist Party can rein in the bureaucracy and state-owned enterprises it has built up.

In the wake of the ticketing system crash, the ministry was criticised for offering the contract to build the online platform to a subsidiary company without transparent bidding.

Hu Xingdou, a social commentator and economics professor at the Beijing Institute of Technology, said the government lacked the ability to change the system that supports it.

"The government's status isn't derived from the people's votes, but from the allegiance and endorsement of these entrenched interest groups," Hu said. "If the government is to strip the power from vested interests, it imperils its own status and erodes its own power base."

FROM REFRIGERATORS TO HOUSES

While the Ministry of Railways has lost little power over the decades, some things have changed, the scale of corruption, for one.

Twenty-two years ago, $1,100 in bribes, a gold ring and a refrigerator led to the downfall of a deputy rails minister. Since then, household appliances have been replaced by much more lucrative prizes.

The business journal Caixin reported in December that the ministry's recently deposed deputy chief engineer, Zhang Shuguang, in 2002 bought a home in Los Angeles for about $860,000 while on a monthly salary of a few hundred dollars.

indiatimes.com

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