RAILWAY PRIVATISATION PROGRAMME GETS A FRESH IMPETUS
By B. Sivaraman
On July 19, 2019, the day dawned normally for the people of Rae Bareli. In the busy national highway that passes through this small town in the constituency of Congress leader Sonia Gandhi, people were going about their daily routines normally. Unexpectedly, there was a sudden commotion. Thousands of people suddenly marching through this small town shouting slogans disturbed its morning serenity. It turned out to be a protest rally by the workers of the Modern Coach Factory belonging to the Indian Railways.
The protest was to denounce the 100-Day Action Plan announced the previous day by the Railway Ministry. As a part of this 100-day plan, Indian Railways had announced privatisation of production units of railways, and the Railway Board had even scheduled a consultation meeting with this agenda on 27 June 2019. As a first step towards this, corporatisation of Rae Barely coach factory was announced in the plan itself. As soon as this announcement came, all the 4000 workers spontaneously came out, took out a rally in protest, and then went on a strike. After this strike, the 27 June meeting was cancelled by the Railway Board.
The state-of-art Modern Coach Factory was inaugurated by Sonia Gandhi in 2007. When Modi visited Rae Bareli in December 2018, during his election campaign, he also went around the coach factory. Coming out, he announced that the factory would be made a global hub of coach production. However, as part of his government’s fist moves he opted to put it on a chopping block. As Rae Bareli was the sole constituency in Uttar Pradesh to defy the Modi wave to elect Sonia Gandhi, he perhaps did this with malicious glee as an act of vendetta. As numerous ancillaries had come up, the economy of the town too revolved around this factory. So the local population too is angry with Modi for his vendetta.
The government has been elected for five years and coming up for a flash action plan only for the first hundred days can be nothing but a gimmick. Privatisation of Railways, or even parts of it, cannot be a 100-day affair either. Then why make long-term policy announcements part of an immediate action plan?
This announcement was contradictory to the earlier announcements, and hence the announcements of Modi Government do not carry credibility. In April 2017, the then Railway Minister Suresh Prabhu categorically ruled out privatisation underlining the fact that Indian Railways had to meet social obligations to the tune of Rs. 30,000–35,000 crore through subsidies, passenger rates and other concessions. On 11 June 2018, the new Railway Minister Piyush Goyal who replaced him too reiterated the same saying, “”Let me make it very clear that there are no plans to privatise railways, either now or ever”. And privatisation of railways is the prominent agenda in the 100-Day Action Plan of the Railway Ministry!
It is not that Modi’s ministers were taken unawares. They were plainly lying through their teeth. They themselves were steering the multi-faceted privatisation process that was already on. Neo-liberal theory of privatisation undergoes modification in India with an Indian imprint –privatisation is just an investment opportunity for private sector and such an investment opportunity is also a lucrative opportunity for cuts, kickbacks and political fund-raising.
As far back as in 2017 itself the Railway Ministry under Suresh Prabhu circulated a draft cabinet note to various ministries seeking their response to handing over 400 railway stations on a 45-year lease to the private sector for redevelopment. It was a different matter that the proposal met with a lukewarm response from private parties. After drawing up an unnecessary ambitious plan of redevelopment of railway stations for Rs.1 lakh crore, Piyush Goyal recirculated the note in January 2018 with a modified proposal involving 600 railways stations on a 99-year lease! He did this with the blessings of the PMO despite objection from the Finance Ministry, which wanted the lease period to be restricted to 60 years only. To further push his proposal, the Manduadih Railway Station in Modi’s constituency of Varanasi was developed into a swanky showpiece resembling Frankfurt Airport at a huge cost! Even before Cabinet clearance, the Railway Ministry has embarked upon a path of modernisation of 50 such stations initially through Indian Railway Station Development Corporation (IRSDC)at an initial cost of Rs.7500 crore in 2019 itself, involving private sector through PPP.
Corporatisation and PPP are the initial steps at privatisation. Not just IRSDC, several parts of Railways activity have been hived off and converted into corporations like Container Corporation of India (CONCOR), Rail India Technical and Economic Services (RITES), a Railways consultancy and infrastructure development firm, Indian Railway Construction Co. Ltd. (IRCON),Indian Railways Catering and Tourism Corporation (IRCTC) and Railtel Corporation of India are a few examples. A closer scrutiny of their finances shows that almost all of them are dependent on Railway Budget overwhelmingly for their business. Though they have been listed as public limited companies, it is a different matter that no private entrepreneur has come forward to touch them even with a barge pole leave alone taking them over.
While Piyush Goyal has announced a target of 100 per cent electrification, he has also declared his intention to privatize 30,000 kms of power transmission lines to earn Rs. 30,000 crores.
Indian Railways also aims to earn about Rs. 50,000 crore over the next 10 years from commercialisation of rail land near stations, another indirect route to privatization.
And now the 100-Day Action Plan of the Ministry of Railways has announced handing over the running of trains to private companies. Misleading unofficial reports are saying that only two routes would be privatized initially on an experimental basis in low-congestion and low-revenue routes. When contacted about this, Mr. Ilango, Vice-President of the Dakshin Railway Employees Union (DREU) says, “The actual proposal is to hand over even premier trains like Rajdhani and Shatabdi and high-premium routes like inter-city expresses and routes running along the Golden Quadrilateral and those linking tourist and pilgrimage centres to private parties. RITES wrongly estimated that at present 25 per cent of the railway workers are surplus and proposed downsizing. If 25 per cent of the railway routes, especially the lucrative ones, are privatised, the threat would be real and half the railway workers would have to go home”.
“The dedicated freight corridor funded by Japan and the World Bank has already been handed over to the Dedicated Freight Corridor Corporation of India (DFCCIL) and though it is the Indian Railways which has to pay back the money, under the World Bank instruction, it has to pay for the goods trains it runs through the corridor as it will involve private companies to build and operate large parts of that corridor”, Ilango adds.
“Bibek Debroy Committee recommended amendment to the Indian Railways Act to set up a Railway Development Authority to handover rail routes to private operators. In 2017, privatization of parts of Railways’ operations has been started based on just a cabinet decision. Now without even setting up a Railway Development Authority, routes are being privatized. It is patently illegal”, he claims. Bibek Debroy, who is now a Niti Aayog member, wants Indian Railways to shed its social service obligations like concessional fares to 53 categories like the handicapped and senior citizens amounting to Rs. 33,000 crore in 2014, which accounted for 67 per cent of the total passenger revenue of Rs. 49,000 crore that year. He wants the Railways to shed schools, hospitals, and printing presses and 5 presses have already been closed down. This is also an advocacy to favour private sector as private corporates would not foot the bill”, another CITU leader says.
“If the Modi Government doesn’t give up the new proposals for privatisation, an indefinite all-India strike would be inevitable and a couple of days of strike can cripple the Indian economy”, Mr. Ilango warns. Rae Bareli is a pointer to that! (IPA Service)