Open Forum
New Delhi, 15 July 2020
Privatising Railways
JUDICIOUS PLANNING VITAL
By Dhurjati Mukherjee
The Indian Railways
plan to allow privatisation has been announced and it is to become a reality from
April 2023. However, there is need to get down to specifics and tie up the
loose ends. This is the first initiative for private investment for running
passenger trains on the Indian Railways network, though recommended many
decades ago. It actually began last year with the IRCTC, a subsidiary of the
Railways, introducing the Lucknow-Delhi Tejas Express.
Private companies
would operate passenger trains on its network by inviting Request for
Qualifications (RFQ) for participation on 109 pairs of routes through 151
modern trains, with each having minimum of 16 coaches. According to Railway Ministry,
18 pairs of such trains will be operated under Mumbai cluster followed by 13
pairs each under Delhi and Prayagraj regions. As per the bid document, 12 pairs
of such trains will be operated under Chennai region, 10 each under Howrah,
Patna and Secunderabad clusters and nine each under Jaipur and Chandigarh. The entire project would entail a private
sector investment of around Rs 30,000 crore.
In the North East, nine
routes have been identified for private sector investments. Among those
selected in Northeast Frontier Railways (NFR) are Guwahati’s link to national
capital, Delhi and cities such as Kolkata, Pune, Bangalore and Bhopal. Importantly,
the routes move through Jalpaiguri, Alipurduar, Cooch Behar – all tourist
destinations of the region from where profits would be quite high.
Railway Board Chairman
V K Yadav recently stated that while the objective is to increase availability
of trains, fear of job cuts is unfounded as these trains would constitute only five
per cent of mail and express trains that are operated. However, questions arise
as to how the trains would be operated by private parties in highly congested
routes as right now tracks need to be increased and so also the focus on renewal,
improved signalling, and rolling stock maintenance.
As per the Ministry’s
statement: “Objective of this initiative is to introduce modern technology
rolling stock with reduced maintenance, reduced transit time, boost job
creation, provide enhanced safety, provide world-class travel experience to
passengers”. It insists that majority of such trains are to be manufactured in
India (Make in India) and that the private entity shall be responsible for
financing, procuring, operation and maintenance of the trains.
Trains shall be
designed for a maximum speed of 160 kmph and thus there would be a substantial
reduction in journey time. The running time taken by these trains shall be
comparable to faster than the fastest train of Indian Railways operating in the
respective routes. Moreover, the coaches will be modern and require maintenance
after running 40,000 km compared to the present 4000 km.
The Government thus wants
to allow private parties to bring out special category trains that would
compete with flights and air-conditioned buses. Presumably, the fares would be
quite high, even higher than existing premium trains, such as Rajdhanis and
Durontos, and obviously beyond the reach of a major section of the population,
which does not have the resources to pay for a faster and more comfortable
journey.
Though there may be
need for such trains, modelled on lines of foreign countries, this would not
reduce congestion as the masses would not be in a position to pay the high
fares. In our planning strategy, we fail to take into account the needs and
aspirations of the economically weaker sections and lower income groups. When
we talk of railway modernisation and/or expansion, what must be our priority
focus is to provide safe journey for the aam
janata (masses) who have to strive hard for their sheer existence.
Presently, the Railways
run on the basis of cross subsidies and budgetary support. Passenger services
are subsidised by freight earnings. The Railways finances are so stressed at
this moment that there has been postponement of renewal of aged assets, as per
the Comptroller and Auditor General report. In such a situation, it cannot be expected
that the transporter would renew these assets from borrowed funds and then
invite private parties to run trains.
There has to be
definite plans as to how much the private parties invest to gear up the
finances of the railways or the profit-sharing when private trains would
eventually run. But so far what is known is that the private entity shall pay
to Indian Railways fixed haulage charges, energy charges as per actual
consumption and a share in Gross Revenue determined through a transparent
bidding process. Remember, the Bullet train which is expected to run shortly
(between Delhi and Ahmadabad) necessitated upgradation of tracks, which are
being carried out. The question is whether private parties will they pay at
least a part of such upgradation?
A point that needs attention
is that probably last year or even earlier, proposals were floated regarding
giving land near railway stations for setting up markets, restaurants, hotels
etc but this has not been implemented. Also modernisation of stations was envisaged
with public-private partnerships (PPP) but here too there is not much progress.
This is obviously a judicious way to earn resources for the national carrier
and, in the process, ensuring that stations remain clean.
The present conditions
of the Railways functioning as also its coaches need drastic improvement. While
the air-conditioned coaches are relatively better, there is need for
upgradation of sleeper coaches, which are the lower income group’s mode of travel.
This can improve if serious efforts are made to generate more revenue by weeding
out ticketless travel, purchase of platform tickets, strict vigilance to check
corruption and, if necessary, raising a minimum amount of the price of tickets.
The purpose of
privatisation as can be assessed is to gear up functioning and provide extra
comfort for those who can pay for it. The pricing structure of tickets should
receive the nod from the Railway Ministry and should be in consonance with the
Rajdhanis and Shatabadis. Obviously, it is not intended to give profits to some
private parties who are close to the powers that be.
Thus, a regulator has
become all the more necessary to protect consumer interest, as pointed out by Railway
Board Chairman a few days ago. It is expected that such a regulator would draw
up a proper strategy and fixing returns that would accrue to the zonal railways
before finalising any plan of privatisation. The Railways should remember the
idiom ‘Well begun is half done’.---INFA
(Copyright, India
News & Feature Alliance)
|