Modi govt denied it on floor of Parliament but Indian Railways’ privatisation well on track

Container services of high rated commodities by Container Corporation of India have already been privatised. Ticketing and tourism arms of Railways too have been hived off to private players

PTI Photo (file) Representative Image
PTI Photo (file) Representative Image
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M Y Siddiqui

With a recent letter from Cabinet Secretary to Chairman and Chief Executive Officer, Railway Board in the Ministry of Railways asking him to intimate his office the monthly progress of privatisation of Indian Railways, the process of its all-round privatisation has been fast tracked.

This follows recommendations of a Panel on Rationalisation of Government Bodies and Proposal for the Ministry of Railways, headed by Principal Economic Advisor Sanjeev Sanyal in the Ministry of Finance. Modes of privatisation will be Public-Private Participation (PPP), Joint Venture (JV) or outright privatisation of major activities like train running, asset maintenance, station management, project management, execution, production units, school management, medical services and so on.

All relevant domains will reside in the private sector, supported at the lower level by Group B managers and supervisory technical cadres. Privatisation involves major restructuring that could lead to the closure of major establishments, merger of some organisations and private participation in operations of railway schools and railway hospitals.

In this backdrop, Railway Minister’s declaration in the ongoing Budget session of Parliament that the government will not privatise Indian Railways sounds fantastic, surprising and hollow in view of the Cabinet Secretary’s impugned letter. The Cabinet Secretary reports directly to the Prime Minister. His words to Secretaries in the Government work as gospel in the present set up, with no minister having any real authority.

The ministers just enjoy power and pelf. The entire governance is driven by the PMO. Ministries/Departments are there just to implement the PMO’s orders. Railway Minster’s assertions, therefore, sounds farfetched and unconvincing. The Modi Government is going whole hog in implementing Sanyal panel recommendations on privatisation.

Well, in the scheme of the Constitution of India, a Minister in himself/herself constitutes Government of India in respect of areas under his/her charge enjoying unbridled reservoir of power whose decision cannot be changed or modified by even the PM except the Union Council of Minister, a hallmark of cabinet system of democratic governance. But for all practical purposes, no words of individual Minister can be taken for granted in the current regime.

As a sequel to this, IR will lose its social responsibility. All sops and concessions to the people except in respect of select few cases already have been withdrawn. Concessions to people in different categories are given as a hallmark of responsive political and democratic governance to generate public goodwill and trust that the government is caring. Net result of railways privatisations will increase all round costs of rail services to the nation.

Employment has shrunk to about over 800,000 with approximately 300,000 vacancies existing and about matching number of employees working on contract-basis with no job security and other benefits like accommodations, children education allowances, medical facilities, pension benefits etc. All such regressive actions and its ill-effect on people are for everyone to see.

Privatisation of remunerative high-density track passenger services are progressing at a fast pace. Freight trains on the Dedicated Freight Corridors (DFCs), currently under progress, on Delhi Kolkata and Delhi-Mumbai and Kolkata Delhi-Mumbai DFCs, are sought to be privatised.

Already, bread and butter yielding container services of high rated commodities by the Container Corporation of India have been privatised. So is the case with the ticketing and tourism arms of the Railways-- the Indian Railways Catering and Touring Corporation (IRCT). Both have been hived to private players.

Privatisation has already taken a toll on Central Organisation for Railway Electrification (CORE), which has been closed. Central Organisation for Modernisation of Workshops (COFMOW) and Indian Railways Organisation for Alternative Fuel (IROAF) have been closed, signalling that Sanyal panel report is being implemented.

The Information Technology arm of the Railways, the Centre for Railway Information System (CRIS) that develops software capacity like passenger ticketing, freight invoicing, passenger train operations including strategic one, management of train crews, management of fixed/ rolling assets, is being disbanded and all such works being transferred to IRCTC.

However, because of part privatisation, delegating these responsibilities to IRCTC may jeopardize national security on train operations for strategic purposes.

Going by the plan, RailTel, the largest telecom infrastructure on Indian Railways that focuses on modernising operations and safety systems through optic fibre networks along railway tracks, is being merged with IRCTC.


RITES (Rail India Technical and Economic Services Ltd) that provide consultancy on transport systems, exports rolling stock, is taking over Kolkata-based Braithwaite & Co. Ltd. that produces rolling stock for IR and is sick since 1992.

Rail Vikas Nigam Ltd. (RVNL), which implements creation and augmentation of rail infrastructure on the Golden Quadrilateral connecting four metros and major ports, is being merged with IRCON (Indian Railways Construction Company Ltd) ostensibly on the ground that their work profile is almost common.

Besides, 94 Railway schools imparting education up to senior secondary standards to the wards of railway employees across the country are being privatised. One of the options under consideration in this context is to hand over these schools to Kendriya Vidyalaya Sangathan.

Added to this, 125 Railway hospitals and 586 health units (wellness centres) are being privatised and opened to general public to enhance health infrastructure with private participation.

Railway factories known as departmental Railway Production Units are sought to be brought under the Central Public Sector Enterprises (CPSEs). When decided, assets, infrastructure and employees of all the eight Railway Production Units would be transferred to the CPSEs, as proposed.

Railway Production Units are: Integral Coach Factory (ICF), Chennai, Rail Coach Factory (RCF), Kapurthala, Modern Coach Factory (MCF), Rai Bareilly, Chittaranjan Locomotive Works (CLW), Diesel Locomotive Works (DLW), Varanasi, Diesel Loco Modernisation Works (DLMW), Patiala and two Rail Wheel Units at Yelahanka, Bengaluru and Bela (Bihar) are being transferred to the CPSE. This would enable the government to list it in the capital market for IPO.

Each of the Central Training Institutes for eight organized Group A services (five from Combined Engineering Services Exam and three from Central Civil Services Exam) is being merged with the National Rail and Transportation Institute of National Importance following merger of eight Group A services into a single service cadre titled Indian Railways Management Service (IRMS) with reduced combined services strength from more than 8,000 to fixed 5,000 cadre strength (reduced by 40 per cent) of IRMS, signalling a leaner managerial cadre to oversee rail services to the nation and ever curtailing workforce therein.

(This was first published in National Herald on Sunday)

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