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Indian Railways : Heading Towards Privatisation….?

Tukoji R.Pandit

Much as the government may deny it there are enough reasons to believe that it has marked Indian Railways for privatisation. The process may not be completed in a hurry but once it starts in earnest it may be difficult to stop it. The temptation of huge cash flow by selling the enormous railway assets will not be easy to resist for a government that openly squeezes the central bank and is ready to undersell its profit-making Navratna companies to enrich its cash strapped kitty.
With a lot of fanfare, a ‘private’ train service—Tejas—run by a subsidiary of the Indian Railways was recently inaugurated on the busy Delhi-Lucknow route. It was offering ‘airline’ type luxury but at a price which was more than a plane fare—Rs 3000 for a single, one-way journey. It was no surprise to learn that the train is not running to its full capacity. The sight of rows of empty seats on a train in India is a very rare phenomenon where most passengers travelling on low-priced tickets are packed like sardines in dirty coaches.
While privatisation of all key routes may have to wait, the government is believed to have already earmarked eight production units of the Railways for handing over to private players. It means that manufacture of locomotives, wagons and coaches, wheels and axles will be transferred from public sector to private companies seeking to earn profits. To what extent the new owners are able to streamline production in these factories will be seen later but to begin with privatisation may result in job losses. That fits into the trend of shrinking job market which the government, of course, denies.
Indian Railways has not exactly established a reputation for excellent service but it does meet the travel needs of people in a country of long distances and where incomes are still low. A claim often heard is that privatisation will ensure ‘quality’ service. There should be a question mark over that.
India will soon be entering the ‘bullet’ era which will, no doubt, be another election-winning card along with enhancement of speed of trains on trunk routes. The introduction of bullet train, however, does not impress a large number of people. Its fare structure will be way beyond the paying capacity of the average traveller. There is also the question of saving time.
The proposed Mumbai-Ahmedabad bullet train will hit a speed of 300 kmph or more. The distance of about 500 km will be covered in four or five hours because of stops on the way. That is less than the eight hours an express train takes to cover the distance now but the bullet train fare will be more than the plane ticket. Besides, one would expect a train hurtling at 300 kmph to cover the distance in less than two hours if a ‘bullet’ train has to live up to its reputation. The ‘bullet’ train does not sound like a better way of saving time in travel when all you can expect to save is an hour or two after paying through your nose.
To facilitate running of trains at faster speed and also add to their numbers on busy high-density routes like Delhi-Mumbai and Delhi-Kolkata implementation of the scheme to lay dedicated or exclusive tracks for freight or goods train is underway. It is expected to be completed by the end of 2021. It will certainly make it easier to run more trains on these routes and at higher speed which will reduce travelling time. But if most of the fast trains or all of them are run by private players the average traveller looking for cheaper mode of travel may be disappointed.
Privatisation in the railways is not a recent phenomenon. In 1991 when India’s ‘socialist’ economy was leaping towards market economy, a step to introduce privatisation in the Indian Railways was taken with the ‘Own Your Wagon’ scheme. The railways also introduced the ‘build, operate and transfer’ or BOT scheme to attract investment of private funds in building or improving the infrastructure. The response was poor. A primary reason was that the private investor, unlike the government, wants quick returns, which was not possible in a capital intensive sector.
The concept of ‘luxury’ trains for tourists—rich ones—was also introduced with the Indian Railways running Palace on Wheels on the ‘golden triangle’ route of Delhi-Jaipur-Agra in collaboration with the Rajasthan government. In its initial years the trains with its high tariff proved quite popular but lately it is said to be on the decline.
Coming back to the privatisation of passenger trains, it is not clear how certain issues regarding operation and security will be tackled. It was announced that passengers travelling in the new privatised trains like the Tejas, will be entitled to refund in case of delay in the running of the train. But who exactly will be paying for it? The Indian Railways which will be maintaining the tracks and the signalling system or the private operator? It can be assumed that the private operator will not be willing to pay because the delay is more likely to occur due to reasons beyond his control.

And what about the law and order question? A lot of thefts and other crimes take place on the trains. At present there is a complicated system to deal with crimes on the railways with both the Indian Railways and state governments sharing responsibility. There is a proposal to create a single command and control system but the states are opposed to hand over their power to the railways or any other single authority.
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