Judicious planning vital

Privatising Railways

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