Narendra Modi, Prime Minister made a public statement in 2014 that the public sector was born to die. He also stated that it should either be allowed to die or should be privatised. Now the government is on a privatisation spree. In the case of railways, catering has been privatised leading to price increase, the stations are getting privatised and 151 trains are also going to be privatised. The land which is owned by railways are proposed to be given on lease for 99 years. Step by step entire railway, which is the largest transporter will be in private hands.

This is happening when in Britain, railway lines which were privatised by Margaret Thatcher are being re-nationalised due to poor service, increased cost and frequent accidents.

Let’s have a look into the railways. The vast resources under the disposal of the Indian Railways and the scope for exploiting the infrastructure laid with billions of rupees investments made from the tax payers money is a constant attraction to the preying private sector. Though the government has set in motion the privatization of the railways, strong public opinion is against it.

The travel by the rail network in North America and Europe and other countries are costlier than air travel. The Indian Railways mainly cater to the poor and middle class population at cheaper fares due to subsidisation of the passenger travel. Privatisation would sound the death knell for the most reliable mode of travel for the common man. The employees strength is being reduced every year. Many of the services are being outsourced. Now, there is a move to privatise railway stations and import coaches and wagons.  

As per CAG report for 17-18 and 18- 19 the railway finances are in a bad shape. If railways had not taken advance payments for future service the expenditure would have exceeded the income. The operating ratio in actual terms was 101. That is railways spent 101 rupees and earned only 100 rupees.

Why and How?

Railways in 18-19 had a profit in goods earning of Rs 45,900 crores and incurred a loss of Rs 46,000 crores in passenger segment. Indian railways cross subsidises passenger segment from the profit of goods earnings. As per CAG report all classes are making losses except AC 3 tier and AC chair car. Whereas railways incur an expenditure of hundred rupees for a travel it charges only 53 rupees and subsidises 47 rupees from goods earnings. Apart from this there are 53 concessions extended to passengers including senior citizen concession, patients concession, students, youth, Kisan, media person concessions are there. All this will go if privatisation is allowed.

Indian railways run 2800 mail and express trains. Modi government in its national infrastructure pipeline proposed 500 private trains before 2025. Immediately by March 2023, 151 trains in 109 routes are under process for privatisation.

The effects

These private trains will have only AC 3 tier and AC chair car which make profit. There won’t be general second class or sleeper class for lower and middle class people. The private will have freedom to fix their rates. There will not be any of the concessions available in Indian railways. Indian Railway should not run any train 1 hour before and after the private train. Though they declare that private trains will run 160 kilometre per hour they have time tabled only to run 50 to 80 kilometre per hour. All these routes are profit making routes. So railways will run only loss making routes. All profit to private and all losses to Indian railways.

No more concessions

Besides this the infrastructure pipeline says that the 30% of goods trains will be handed over to private by 2025. Dedicated freight corridors also will be open for private operation. Therefore Indian railways will be left with only some goods trains and loss making passenger trains. This will make the railway finances further deteriorate. It will become impossible for the Indian railways to give concessions to the passengers. It will become difficult to pay salary and pension also. Already 500 passenger trains have been converted into express trains depriving the rural people to access towns for marketing, employment and studies. They also intend to privatise 30% of stations by 2025. Already as per CAG Rs 1 lakh crore is due to be spent on renewal of track, signal, bridges etc. At present average speed of goods trains is 25 kmph and the average speed of passenger trains is 50 kmph. Tickets are not available on demand. Goods traffic by railways is only to the extent of 30% of national goods traffic. Therefore there is dire need for heavy investment in railways without which the tracks are already fully congested. Running of private trains in this situation cannot be possible unless they cancel many of the trains run by Indian railways.

Inadequate funding by Government

Finance minister in the last budget announced 50 lakh crore investment in 12 years that is 25 lakh crore in 6 years. Later it was revised to 13. 69 lakh crore in 6 years. This means 1.22 lakh crore government investment in 2019-1920 and 2.68 lakh crore investment in 20-21. But government investment came only to the extent of 37,000 Cr and 45000 crores respectively.

Gross neglect of investment leads to destruction of infrastructure leading to derailments and accidents. The motto of Indian railways has been to run faster and safer trains at affordable cost to the general public of this country. The present policy of neglect of investment and privatisation of existing routes will only destabilize the all the three principles of faster safer and at affordable cost. Argentina, England and other country experience shows that privatisation will lead to destabilize the railways. Re Nationalisation is taking place in many countries.

Employment and Reservation

Indian railways has 12 .2 lakh permanent employment with 2.4 lakh SC employees and 1lakh ST employees.

If privatised these permanent employment opportunities and social justice will be affected. Already railways have surrendered 50% of 3 lakh vacancies in view of privatisation. It has also put on hold 1.3 lakh recruitment process. It has decided to freeze dearness allowance for employees and pensioners. It is also to cut 50% of travelling allowance besides cutting incentive bonus and running allowance.

Integral Coach Factory produces the best trains including Tejas. But now govt wants to import. Is it self reliance?

Railways also run good hospitals and schools. That will also come to an end.

In sum, privatisation of railways with huge assets and employment oppurtunities will be a death knell. Railways built with the tax payers money can not be sold by Modiji to corporates, National and International. People of the country will not allow that.

Thomas Franco is former General Secretary of All India Bank Officers’ Confederation.