PAPER PRESENTED ON THE SEMINAR by K Parthasarathi

ALL INDIA LOCO RUNNING STAFF ASSOCIATION 

PAPER PRESENTED ON THE SEMINAR 

ON THE 100 DAYS’ ACTION PROGRAM OF RAILWAYS 

A STEP FOR RAILWAY PRIVATIZATION 

ON 06TH AUG 2019 AT BENGALURU 

Indian Railways is the fourth largest Industrial establishment and largest employer in the world. To be a part of this lifeline of India is indeed a pride for each one of us. In pre-independence era, Indian Railways were owned and operated by government as well by various private rail companies. Even some government owned companies were managed and operated by private. Between 1924 and 1944 all were nationalized by British Indian Government. In the year 1951 Government of India reorganized the Indian Railways. It was a milestone for industrialization and modernization of India. But after three decades, many committees were appointed to restructure Indian Railways through privatisation. During 1980s Prakash Tandon committee, 1990s Rakesh Mohan committee and in 2015 Bibek Debroy committee recommended for Privatisation of Indian Railways. 

Now the Railway Board vide letter dated 18.06.2019 has directed a "100 days Action Plan" proposed by the Ministry of Railways that immediate action to be taken to implement the Action Plan by 31st August 2019. These include Wi-Fi for passengers, Rationalisation of the passenger fares, Elimination of all manned LCs, Speed raising of NDLS-HWH & NDLS- Mumbai routes to 160kmph, Private passenger trains, Corporatisation of PUs of Rolling stocks and workshops, Digital rail corridors, Advanced Signalling System, Station redevelopment, Restructuring of Indian Railways and Technological revamp of IR working. At the glimpse it all seems development of Railways. But close scrutiny on each points reveal a different background of it. 

Bibek Debroy Committee 

The 8 member committee under the Chairmanship of Dr.Bibek Debroy gave their final report on June 12, 2015. Debroy Committee recommended for unbundling the activities of Indian Railways, by setting up an independent RRAI with quasi-judicial power, setting up of Indian Railway Manufacturing Company (IRMC), bringing back licensing regulations, abolishing railway budget as well railway ministry etc. The Committee recommended for opening all activities including manufacturing & maintenance of rolling stocks & locos, assets creation, train operation with the independence of fixing their own tariff rates, private owning of train formations & their maintenance, etc. In the name of 100 days action programme Government pushes the agenda of “Private passenger train operators” and “Indian Railway Rolling Stock Company”. These are only aiming at complete privatization of Railways. 

This eleven-point action plan is in the direction of unbundling of railways and restructuring recommended by Bibek Debroy committee with a changed nomenclature that used by Debroy committee. 

PRIVATE PASSENGER TRAINS 

The Action Plan proposes for operating private passenger trains. Within 100 days 2 passenger trains will be offered to IRCTC which is a corporation under railway board which would provide ticketing and on-board services apart from haulage of trains ie operation of trains.Also private trains will be given licence on the important routes like Golden Quadrilateral and Diagonals and connecting major cities. The action plan proposes to identify other routes also which have low congestion and connect important tourist spots and Expression of Interest to identify private operators. 

There is an apprehension that being IRCTC is a corporation under the same management of Railway board, the terms and conditions of lease will be liberal and later the same terms and condition will be adopted as a precedence allowing the private operators to loot the people as well as Indian railways. It may be noted that the routes proposed for private passenger trains are the profit-making routes of Indian railways. The proposal of spending an amount of Rs. 13490 Crores for improvement of the two routes proposed for privatisation create a thinking that it is nothing but spending the public money for the benefit of private players, that too when the government is pleading paucity of funds for railway development. 

We saw similar abundancy in fund in earlier occasions for projects which are beneficial to corporates. In Kerala when the Vizhinjam port was handed over to Adani, the Khajana of surface transportation ministry got huge surplus to flood it for development of roads to the port. 

It is reported that the government wants to hand over the running of premium trains including the Rajdhani and Shatabdi express trains to private operators, for which tenders would be floated within four months.There is no doubt that all popular trains, superfast trains and express trains will follow the Rajdhani and Shatabdi trains. 

Rationalise Passenger Fare - Give it Up Subsidy - Against Poor 

Hiking Railway fares is also on the cards. The government wants to reduce the subsidies through a ‘Give it up’ campaign. This is a trump card played by the same Government to create an awareness against the subsidy on LPG, - there the poverty of rural women was projected. What will be the Mantras in case of Railways is yet to be seen. It is decided that Railway itself will propagate the campaign for ‘give up subsidy’ through Print, Visual and Social Media. In a calculated move Railway ministry had decided recently to hand over the propaganda wing of public relations department to private and tenders are floated ie. The corporate will design the propaganda against subsidy using public money, against the interest of the public, advocating hike in fare and promoting private trains. 

Bibek Debroy had criticised that cross subsidy for Passenger service from Goods revenue is the main hurdle for Private entry in train operation. In a nut shell the Corporates will campaign against subsidy using Railway money for their benefits. It is important to note that overwhelming majority of the railway passengers today belong to the poor and low-income sections. We are seeing 300 to 400 passengers travelling in general Coaches run continuously for two to three days. Railways are running Andyodaya trains having second class sitting coaches alone between stations 1500 to 2000 Kms away and they remain over crowded. Providing cheap and affordable travel is the Constitutional responsibility of the Government. Reducing subsidies and raising fares is nothing but a ploy to favour the private operators who would be operating the trains only for profits. The campaign against passenger fare subsidy is nothing but a fatal blow to the rural poor those who lost their lively hood due to agrarian crisis. Denial of cross subsidy prevents them moving to urban cities to retain their lives. 

GOODS TRAINS ALSO 

Privatisation of operation of goods trains also will follow as recommended by Debroy. 

IRRSC – A MASTER PLAN TO CONVERT LARGE NUMBER OF RAILWAY EMPLOYEES TO COMPANY EMPLOYEES 

Another proposal in the Action Plan is the separation of the production units and workshops from Indian Railways. The 7 production units including the associated workshops are proposed to be ‘hived off’ to the ‘Indian Railway Rolling Stock Company’. This is nothing but an attempt to hand over and outsource production to the private players killing our public sector’s indigenous manufacturing capacity. The only difference with Debroy is that he suggested the name “Indian Railway Manufacturing Company” (IRMC) instead of “Rolling Stock Company.” Though all the units come under one company, all should function as individual profit centres. 

Indian Railway is fully independent in manufacturing passenger coaches & locomotives for its requirement. Seven production units enable Indian Railways for continuously upgrading its passenger coaches and locomotives. First production unit Chittaranjan Loco Works (CLW) was started in the year 1950 and latest one Modern Coach Factory (MCF) stated its production in 2011-12. Every Production Unit of Indian Railways proved their worth and they are able to deliver all the needs of Indian Railways according to the dynamic changes. Production units of Indian Railways Chittaranjan Loco Works - Chittaranjan Diesel Locomotive Works - Varanasi Integral Coach Factory - Chennai Rail Coach Factory - Kapurthala Modern Coach Factory - Reabareli Rail Wheel factory - Bengaluru Diesel Loco Modernisation Work - Patiala. 

Advantages of in-house manufacturing of Rolling Stock are, 

a) Production Units (PUs) not only assimilate and adopt new technology, they enable IR to own the technology as well. 

b) Cost of locomotive and coaches manufactured by our PUs is much lower than the market rate. 

c) It costs much less to maintain assets manufactured in Indian Railway’s own factories as many critical subassemblies are also manufactured here. 

d) PUs enables import substitution and promotes ancillary industries. 

e) There is no transfer pricing and profit addition in being IR unit. 

All seven PUs of Indian Railways (excluding workshops) are having around 50000 staff strength as per book of sanction. There will be 3 lakh employees if workshops are included. 

All seven Production units and workshops of Indian Railways are having huge land in their possession with very good infrastructure both for industries, housing and other facilities. Indian Railway & their PUs and workshops travelled a long way to convert bare land into a self-sufficient infrastructure. All seven Pus and workshops can be termed as mini town on their own with near self-sufficient infrastructure of housing, hospital, school, world class sports facilities, etc. ICF Chennai is 100% self-reliant on electricity by having its own solar plant. Not only industrial development, socio-economic improvements brought by this PUs in their respective districts/states are immeasurable. True to the basic character of Railways, PUs of Railways adopted to the changes according to the market’s demand. They have state of art manufacturing technologies & human resources. 

Corporatization of Rolling Stock Production and maintenance is not a step forward. On simple arithmetic, Railways need to pay 30% more than the present cost of production in the farm of corporate tax. Coaches manufactured by BEML, already existing PSE, are not cheaper than coaches manufactured by Railway PUs and no unit is available to manufacture coaches less than the manufacturing cost of our PUs. 

Value of Railway PUs cannot be measured in money terms alone, the variety of improvement they brought in & around their location are immense. They are not only piece of land & factory but they are the living entity represents Government of India, a symbol for Nation’s confidence 

Definitely the CPC scale of pay and allowance, the status as Government employee will be lost for the company (IRRSC) employees in future. Employees of BSNL, VSNL and MTNL were government employees and covered under central pay commissions’ up to 4th CPC. They were converted as company employees and now struggling to get their wages. 

HIVING OFF OF SO CALLED NON CORE ACTIVITIES 

Bibek Debroy had recommended for hiving off or shedding off of all so called non core activities which are production units, workshops, railway printing presses, schools, hospitals, RPF etc. We have already seen how production units and workshops are in the pipeline according to 100 days action plan. Already on 3rd June hardly three days after present government took over they passed an order to shut down all the 5 printing presses all over IR before 31st march 2020,to sell all the machines to private and have railway printing done with them. All the staff will be redeployed. Hiving off of other activities may follow suit if no worthwhile action programmes are initiated against. 

There are many proposals for safety augmentation in 100 days action programme. But it is our experience that, the recommendations against the employees were implemented on a war-foot measure, but others will crawl at a snail’s pace. The fund for elimination of LC gates – Rs.50000 crores, should come from Govt. of India and sanction for spectrum for improvement of signals should come from telecom ministry. Debroy committee, in other words NITI AYOG has ruled out any Government funding for railway development. The telecom department is denying 3G and 4G spectrum to BSNL to promote the private ie. The declaration for railway development will not happen but privatisation will go ahead. 

Indian Railways STRENGTH AND CHALLENGES 

Indian Railways has a route kilometer of 65,808 as against 53912 rkm at the time of Independence. It is the largest land asset of around 4.55 lakh hectares. The book value of its assets is Rs.2,08,844 crores. In 2017 - 18 it had gross income of 1,78929.64 cr. with an expenditure of Rs.177264 cr. Thus net surplus revenue of Railways be Rs.1666.61 crores and operating ratio which is the percentage of expenditure over the income remained 98.4% in 2017 - 18. It remained less than 100 for most of the years. 

Indian Railways being the major transport carriers of the country bears a social service obligations towards its countrymen. It is committed offer affordable transportation solution to the poorest section of the society. This essential feature of IR contributes not only promoting economic and industrial growth but also in providing certain services below their cost of operation in the interest of common man. The details of the losses of Railways during each of the last three years on social service obligations are in the year 2015 - 16, Rs.22,262 crores, in 2016 - 17, Rs.25561 crores and 2017 - 18, Rs.31128. 

Overall Indian Railways is not incurring losses. During 2017 - 18 and 2018 - 19 surplus generated by Indian Railways was 1665.61Crores and 3774.51crores(provisional). 

Indian Railway has presently 483 over saturated sections out of 1245 sections. Over saturation of line capacity has resulted in stiff competition from other transport modes in maintaining the freight and passenger model share. Hence speedy execution of capacity enhancement works and availability of commensurate financial resources are one of a main challenges before Indian Railways, which cater to length and breadth of this fast developing country. Another challenge is that many remote hilly regions have remained devoid of railways connectivity. 

Its earning is limited because it is unable to increase its network, capacity,modernize and strengthen safety to meet the demand of growth. As a result the rail road is very much congested. The average speed of goods trains in IR is only 25 kilometer per hour. For passenger/express trains the average speed is only 50 kilometers per hour. In the golden quadrilateral covering Delhi-Howrah-chennai-Mumbai-Delhi 55% of traffic moves, whereas, it constitutes only 20% of the total network. In some network there is 150%occupation. 

This shows that there is a great need for expansion of its network by newlines, doubling, quadrupling, laying dedicated lines etc. There is a great need for more coach, wagon, engine, factories to meet the demand. There is a great need for strengthening safety and up grading the system by modernization. 

As white paper on Indian railways in 2009 put “ since augmentation of capacity is long gestation activity and needs more investment the demand is now met by optimum utilization of assets and manpower”. This policy leads to over utilization of assets, rolling stock, and man power. The policy is ‘sqeezing maximum from minimum’ even at the cost of safety. 

As the National Transport Development Policy Committee on Railways in 2013 put it the railway is investment starved. The NTDPC has recommended that by 2032 in 20 years time from 2012 the market share of railways in freight should increase to 50%.and the passenger demand should be met fully. The NTDPC has recommended an investment of Rs 35, 30,000 crores at 2011-12 prices under various heads. 

WILL PRIVATISATION SOLVE THE PROBLEM 

This eleven-point action plan is in the direction of Report of the Bibek Debroy Committee for restructuring of Indian Railways (IR) as privatisation in all but name, preferring to call it “liberalisation” instead. The Bibek Debroy Report mistakenly blaming all ills on State ownership and holding up privatisation as the cure for all ailments. This is clear from the Report ignoring the substantial evidence of disastrous outcomes from privatisation of British Rail, and the vast experience with diverse rail transport models in Europe and elsewhere. 

In Britain the infrastructure was initially privatised and train operating companies were separated and privatised. There are 25 private train operators. Only one train operating company remained with the government. After great many accidents the infrastructure company was renationalized as put by Debroy himself. Operating costs of private operators will always be shown as high, requiring escalating tariffs. Non-profitable routes will be mercilessly slashed regardless of social needs, and all infrastructure investments will be left to the State. When the dust settles on privatisation, or liberalisation if you prefer, users will have to pay much more, the British government has to shell out huge subsidy to the private operators. Today UK taxpayers bear double the burden they did before privatisation!

2363 stations and 266 routes have been closed as unprofitable. On average, British fares are 30% higher than in continental Europe where many rail services such as in France and Germany are run by State-owned corporations which, incidentally, also operate more than half the rail services in the UK There is a British university study which says that it is a GREAT TRAIN ROBBERY. Now a referendum in Britain has favoured (68%) renationalisation of rail operations also. 

OUR DUTY 

AILRSA strongly condemn and demand to do away with the above proposal, and understood that it is the duty of AILRSA to do whatever possible to stop the privatisation and pledge to do so. We also understand it is a task to be undertaken by the railway workers as a whole and plead all trade unions of railwaymen to unite and fight privatisation. It is a pity that railway recognised federations have not come with a struggle plan giving a national call though local unions conducted in some railways some agitations. AILRSA plead before all rail users, passenger associations and all democratic forces to join hands to protect the cheapest mode of transportation in India. The people as well as Railway employees should unite to thwart the destabilization of Railway system in India and demand Government investment and stop privatization. 

ALL INDIA LOCO RUNNING STAFF ASSOCIATION 

SOUTH WESTERN RAILWAY 

BENGALURU