Out Sourcing

Railway's 'outsourcing' plan put on hold after protests

By Srinand Jha | Hindustan Times – Sun 14 Jul, 2013

India, July 14 -- Indian railway's plan to share in-house designs and drawings of passenger coaches with private parties has created a flutter in its two production units - the Kapurthala-based Rail Coach Factory (RCF) and the Integral Coach Factory (ICF) at Chennai.

Initiating bulk privatisation of passenger coach manufacture, the railways had permitted different private parties, including the Jessops and the Titagarh Wagons Limited, to manufacture different types of coaches for 26 rakes (trains) in 2012.
The plan has remained on hold because of stiff resistance from labor unions at the two production units.
"There are issues of Intellectual Property Rights (IPR) and also matters relating to passenger safety. The Railway Board directive is flawed and coach design and drawings cannot be parted with in this manner," a RCF official said.
Designs and drawings have been jointly manufactured by the Lucknow-based Research Design and Standards Organisation (RDSO) and the production units. These are presently valued at R1500 crore.
"It is unusual for the board to provide these free of cost to the private parties," an official said.
"The 11th plan document (for which the orders were placed) does not envisage outsourcing of coach manufacture and such proposals are also not enlisted in the Vision-2020 document. It needs to be investigated how this outsourcing proposal was inserted into the Rolling Stock Program (RSP) of the railways," asked an official.
"Outsourcing activities were being pursued with the aim of expanding the supply base for coach manufacture because of the ever increasing demand," a Railway Board official said.
Questioning the logic, an ICF official said the capacity enhancement of both the RCF and ICF had been envisaged keeping in mind the future requirements.
"What explains the sudden decision to outsource an activity that is intrinsically linked with passenger safety?" he asked.
"The present challenge is to fend off possibilities of an industrial dispute. This is a worrying situation and the board has been informed about this. We have not shared the designs and drawings with the private parties so far," the RCF official said.