railways privatisation

As Buzz Builds Around IRCTC’s Tejas Express, Will Privatisation Take Wing?

The national transporter is in the process of finalising bidding documents for inviting private players to run about 150 trains.

New Delhi: Buoyed by the successful run of the first ‘corporate’ train between Delhi and Lucknow, the Indian Railways has received strong interest from the private sector even as various unions continue to oppose the plan.

According to sources in the national transporter, at least three Indian airlines have also expressed initial interest in bidding and operating certain train routes as a possible last-mile connectivity solution that they can offer their customers.

Much of this excitement is due to the initial demand that the IRCTC-operated Tejas Express has been attracting. The next Tejas service, which will run between Mumbai and Ahmedabad, is currently getting ready.

Reeling under mounting losses, the Indian Railways has firmed up plans to offer about 50 high demand routes for private train operations, in a move that will involve roughly 150 trains.

The Railways wants to lease out to private operators a number of long distance or overnight journey trains. These include routes such as Delhi-Mumbai, Delhi-Lucknow, Delhi-Jammu/Katra, Delhi-Howrah, Secunderabad-Delhi, Delhi-Chennai, Mumbai-Chennai, Howrah-Chennai and Howrah-Mumbai.

It has also proposed to invite private players for the intercity express on over 12 routes including the Mumbai-Ahmedabad and Mumbai-Pune journeys. Besides this, there are also proposals to operate suburban trains in Mumbai, Kolkata, Chennai and Secunderabad by private players.

Currently, the national transporter is in the process of finalising bidding documents to invite private players to run about 150 trains. The cost of these 150 trains is estimated to be Rs 22,500 crore as one rake will consist of 16 coaches.

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It will be decided through competitive bidding and for this, the tender document is being finalised taking various factors into account, sources told The Wire. The process envisages prospective operators bidding for a minimum of 12 trains and a maximum of 50 trains, which include overnight and day-long trains.

Asked about airlines’ interest in train operation, sources told that some airlines are exploring acquiring certain train routes as a last-mile connectivity solution to increase the demand for their air routes. There is also a possibility that some players may discontinue their non-profitable air routes and focus on train routes instead.

In countries abroad, some airlines have chosen to do this, although its unclear whether the precarious financial health of the aviation sector in India will permit such an endeavour.

“Currently nothing is concrete. Once the tender is floated, the picture will be clear and we will come to know who all are coming,” sources added.

When asked, Indian Railways spokesman K. Shyama Prasad said that the ministry had no information on this and that there would be more meetings before anything is finalised. n it.

According to the potential tender conditions though, private operators will be given freedom to either purchase new trains or acquire it from the Railways on lease. Since this is the first time in the country that the public transporter is allowing private train operators to run passenger services, the government is approaching the final process with caution.

While private players are keen to import customised trains and are seeking dedicated routes to ensure punctuality, the Railways has to take a final call on the issue.

However, the national transporter will still be in control on the safety front, giving away only pricing decision to private train operators.

While the signalling system, loco pilots and platform will remain with the Railways, catering, onboard housekeeping, ticket pricing and checking, infotainment and other amenities will be the train operator’s responsibility.

IRCTC, the Railways subsidiary, which was being divested of 12.5% of its shares through an IPO, will pay nearly Rs 13 lakh per day in haulage and lease charges and is expected to generate about Rs 16 lakh to 17 lakh per day in revenue from the Delhi-Lucknow Tejas Express.

Arun Kumar Das is a senior journalist and can be contacted at akdas2005@gmail.com

IRCTC Readies Fare Strategy For First Train Route Under Railways ‘Privatisation’ Plan

As part of its attempt to encourage privatisation in the national transporter, the New Delhi-Lucknow Tejas Express will be IRCTC’s first route to offer dynamic pricing.

New Delhi: The New Delhi-Lucknow Tejas Express, India’s first attempt at ‘privatising’ its railway routes, will not have a fixed fare but instead offer dynamic pricing that competes with air travel.

Earlier this month, it was reported that the government would hand over custody of the train to Indian Railway Catering and Tourism Corporation (IRCTC), a railways public sector unit PSU, as part of its attempt to encourage privatisation in the national transporter.

According to sources, IRCTC will pay nearly Rs 13 lakh per day in haulage and lease charges and is expected to generate about Rs 16 lakh to 17 lakh per day in revenue.

The handing over of the Lucknow-Tejas’s operations is part of the Narendra Modi government’s 100-day action plan. Its success, government sources say, is crucial as it would pave the way for handing over about 100 more trains to private players for which a policy is currently being formulated.

The broader proposal for the privatisation of the Indian Railways has sparked protests across the country by worker unions.

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While giving IRCTC custody of the train can’t strictly be called privatisation, the idea is to hand over two routes as a pilot project whereby on-board services would be outsourced to private players through an open bidding process.

The larger proposed policy would allow private players control over 25 routes, including metros and regional hubs.

Sources say that the policy currently in the making envisages private players to bring in their own rakes or acquire trains on long lease from the Railways to run across the country. Currently the Railways has 2,800 rakes, of which a minimum of 5% is being considered to be offered on lease to private players.

However, the core function of train running such as drivers, guards, tracks, signalling, train charting and safety will remain with the national transporter. On the other hand, ticket pricing, catering, onboard housekeeping, linens, ticket checking and amenities will be the responsibility of the private operator.

First pilot

While the New Delhi-Lucknow Tejas Express will be IRCTC’s first route, another one will be shortly allotted. The railway PSU is also in negotiation with Uttar Pradesh government over showcasing its welfare programmes and the state’s tourist spots as advertisements.

The 13-coach Tejas Express for Lucknow will have an assured path to reach destinations on time, with just one stop at Kanpur.

Sources say that there will also be a provision for offering a free meal to passengers in case the train is delayed by more than 30 minutes.

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The train, which has about 1,000 seats currently, will also add another 500 gradually with the additional of five more coaches.

Besides quality catering, the train will offer door-to-door service, specially designed board room cabin for meeting, birthday or marriage anniversary parties and shopping trolleys for buying goods like chocolates and perfume among many other services as a package to attract clients.

“We will try to cater to passengers whatever is legally allowed onboard,” a source involved in finalising the details told The Wire.

If a passenger wants to be picked up from his residence and also dropped at his destination, he would have to pay for all additional services. The train will also have welcome service as all passengers would be received and ushered in to their respective seats. There will also be private ticket-checking staff.

Currently more than 50 trains – including a Shatabdi service – and about 30 flights are operational between New Delhi and Lucknow. The two cities are also connected by a well-built highway that facilitates road connectivity.

Though the Tejas Express ticket will be less than equivalent airfare, it will be difficult for IRCTC to depend on just fare collection. That is why we are exploring various ways to attract passengers, sources said and added if everything goes as per the plan then it could achieve break-even in three years.

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The Tejas Express will have modern facilities such as aircraft-like personalised LCD entertainment-cum-information screens, on-board Wi-Fi facility, comfortable seats, mobile charging points, personalised reading lights, modular bio-toilets and sensor tap fittings among others.

The train will take approximately six-and-a-half hours to cover the distance between Delhi and Lucknow and it will run on all days of the week except Thursday and Sunday.

The Lucknow-New Delhi Tejas Express will leave the Lucknow junction at 6.50 am to reach New Delhi at 1.35 pm. The New Delhi-Lucknow Tejas Express will leave from New Delhi station at 3.35 pm to arrive in Lucknow at 10.05 pm.

Arun Kumar Das is a senior journalist and can be contacted at akdas2005@gmail.com.

As Centre Unveils 100-Day Action Plan for Railways, Unions Allege Attempt to Privatise

There have been no major pan-India protests by railway employees since 1974, but the 100 day action plan could trigger mass unrest.

New Delhi: Less than a month after coming back to power with an absolute majority, the Narendra Modi government has approved a ‘100 Days Action Plan’ of the Ministry of Railways. Approved by railway minister Piyush Goyal, the items in the action plan are to be implemented by August 31.

In addition to providing wi-fi at all railway stations, installing advanced signaling systems and eliminating all manned level crossings on the golden quadrilateral and diagonals, the action plan also aims to restructure the railways, corporatise railway production units, ‘redevelop’ 50 railway stations and urge passengers to give up subsidy on train tickets.

The Debroy committee had suggested corporatisation of the Indian railways and encouraging private sector participation in its 2015 report. The action plan can be seen as a continuation of implementing the recommendation of the committee.

Railway unions across the country have expressed strong opposition to this action plan, calling it the first step in the complete privatisation of Indian Railways. The plan to corporatise production units has hit a raw nerve, as employees see this as a direct threat to their status as Central government employees.

The action plan proposes to conduct a detailed study in 100 days to corporatise these seven Production Units (PUs) – Chittaranjan Locomotive Works (CLW-West Bengal), Integral Coach Factory (ICF – Chennai), Diesel Locomotive Works (DLW-Banaras), Rail Coach Factory (RCF – Kapurthala), Modern Coach factory (MCF-Rae Bareli), Diesel Loco Modernization Works (DMW – Patiala) and Rail Wheel Factory (RWF – Bengaluru).

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PUs and associated workshops are supposed to be clubbed into a new entity called “Indian Railways Rolling Stock Company” under the Ministry of Railways. Starting with the newly set up MCF-Rae Bareli, all PUs are to be taken over by the new entity in a phased manner. Since all of these units are performing well, trade union leaders argue that there’s no need to change their structure and operations.

“It’s not just the Modi government, we have opposed such moves by all parties. The UPA under Manmohan Singh was trying to do the same thing. In 2005, then railway minister Lalu Prasad Yadav moved a proposal in the parliament to turn RCF-Kapurthala into a Public Sector Undertaking (PSU). We protested against that as well,” Sarvjeet Singh, general secretary of Kapurthala RCF Employee’s Union, told The Wire. “We are Central government employees covered under the Pay Commission, this status will be done away with once our unit is corporatised,” he added.

On being asked about the possible motive behind the decision, he says that the government might first convert this into a company, then show it as loss making and eventually sell it off to private parties. Citing the example of the ailing Bharat Sanchar Nigam Limited (BSNL), he added there’s no proof that corporatisation leads to better profits or more efficiency.

“The ultimate goal of this action plan is privatisation; it has just been camouflaged as corporatisation,” Tapan Sen, general secretary, Center of Indian Trade Unions (CITU), tells The Wire. He says the role of production units is to supply rolling stock to the railways and maintain a network throughout the country. “They can’t sell their products in the market and only supply coaches, locomotive, engines, wagon and other rolling stock to the Indian Railways,” he adds, arguing that it doesn’t make sense to set up a separate company under the Companies Act unless the end goal is either closure or complete privatisation.

Piyush Goyal. Credit: PIB

Most unions express opposition

Most of the Railway unions have come out with statements against the move and Sen claims that protests have already started in Chittaranjan and Rae Bareli. If not handled with sensitivity, it has the potential to snowball into a large-scale agitation. “The government has started taking us lightly because we haven’t gone on an all India strike since 1974, we won’t hesitate from showing our collective power if we are pushed in this manner,” Manoj Pandey, national president of Indian Railway Employee’s Federation, told The Wire.

The All India Railwaymen’s Federation has also warned the government of ‘serious unrest’ over the action plan. “It is worth mentioning here that serious unrest is brewing among the employees working in production units of the Indian Railways, against the 100-day action plan of the Ministry of Railways,” said general secretary Shiv Gopal Mishra in a letter to the Railway Board chairman V.K. Yadav. “…it may result in a serious threat to the industrial harmony prevailing for nearly four decades over the Railway System,” the letter adds.

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On the ‘redevelopment’ of 50 stations, activists call it an unjust move against the poor and destitute. “Everyone knows that railway stations are the houses for many poor in our country. Hereafter, none without ticket can even enter the stations (as is the case in airports), let alone use station toilets, or platform roofs. The homeless and destitute will lose even this tenuous home,” says a statement by the All India Central Council of Trade Unions (AICCTU).

Referring to PM Narendra Modi’s 2014 speech at DLW Banaras, Amarjeet Kaur, general secretary of the All India Trade Union Congress (AITUC), says the PM has taken a U-turn. In the speech, the PM can be heard reassuring his audience that there were rumours of privatisation of railways but they were all lies as he won’t ever let it happen. Ironically, DLW Banaras is one of the seven production units being considered for corporatisation. “All of these units have the latest machinery and large pieces of land, these steps have been taken to privatise railways bit by bit. This is condemnable,” Kaur told The Wire.

Questioning the government’s priority, Singh says, “There’s no 100-day action plan against hunger, for education or public health. Why the rush to privatise railways? Private manufacturers are being privileged while there’s a deliberate strategy to make us a ‘sick’ unit. If they negotiate directly with railway employees, we can give any desired results. We are all skilled and educated workers unlike contract employees who are being employed for most of the new work now.”