Corporatization and Privatization of Indian Railways is not in the interest nation – Com. Shiva Gopal Mishra to Minister of Railways

All India Railwaymen’s Federation(AIRF), being the oldest and largest recognized federation on Indian Railways, has been closely watching and following all the developments on the Indian Railways. Indian Railways was established in 1853 and right since its formation……

No.AIRF/24(C) Dated: January 15, 2020

Shri Piyush Goyal,

Hon’ble Minister of Railways,

Rail Bhawan,

New Delhi

Respected Sir,

Sub: Corporatization and Privatization on Indian Railways

All India Railwaymen’s Federation(AIRF), being the oldest and largest recognized federation on Indian Railways, has been closely watching and following all the developments on the Indian Railways. Indian Railways was established in 1853 and right since its formation the Railwaymen have been serving the nation 24X7 with utmost sincerity and dedication. The Indian Railways has developed over the years providing the most economical, safest, fastest and comfortable service to everyone. On the other hand, the freight services too have developed with time, catering to the needs of developing small, medium and large-scale industries competing with Road Transporters and reaching out to every nook and corner of the nation.

Being the largest employer and with a staff of 1.3 million dedicated work force serving the nation, the Indian Railways is amongst the world’s largest rail networks with 1,15,000 track kilometers spread over 7,349 stations distributed in 17 zones. The infrastructure of the Indian Railways includes 2,39,281 freight wagons, 59,713 passenger coaches and 9,549 locomotives which are manufactured, maintained and repaired in the Workshops and Production Units. The Indian Railways has been serving for more than 167 years with 295 varied types of concessions for passengers belonging to different categories, such as Military Concessions, Senior Citizens, Freedom Fighters, Cancer Patients, Divyang Passengers and also those accompanying them etc., without any profitability and just with service motto at heart of everyone of the 1.3 million workforce.

Over the years, the Indian Railways has turned out to provide add-on benefits, such as free internet at the stations, escalators, lifts, clean wash rooms, clean stations with clear LED sign and display boards. All these being made available with just one ticket, whether it is a Platform Ticket or a Short Journey Suburban Travel Ticket.

In the recent times it has been noted that certain activities, such as On Board House Keeping(OBHS) activities, cleaning of stations and pit lines, security, maintenance, upkeep of the Railways premises etc. have been gradually handed over to private contractors, who in-turn exploit the labour paying much less than Minimum Daily Wages, and even deny Proper Rest and Social Security. This has been brought to the notice of the responsible officials on many occasions by our affiliates, but to no avail.

Not heeding to the protests of stakeholders; the Government has been indulging in disinvestment in Air India, CONCORE, BSNL, BPCL and has now drawn similar road map for the mighty Indian Railways. Some of the steps that have already been taken to destroy the lifeline of the Nation are:-

I. Leasing of 150 trains and 50 stations: It all started by selling away Tejas Express to Indian Railway Catering and Tourism Corporation(IRCTC), Ex. New Delhi–Lucknow and back. This train stops at just two stations and covers the distance in 6 hours 30 minutes. The ticket costs Rs 2450/- (Executive Class) and Rs 1755/- (AC Chair Car), whereas Shatabdi Express, run by the Indian Railways, Ex. New Delhi-Lucknow and back, stops at five stations and covers the same distance in 6 hours 35 minutes. The ticket costs Rs.1855/- (Executive Class) and Rs.1165/- (AC Chair Car). It is clear that IRCTC is running with a sole aim of profits and offers none of the 295 concessions as those offered by the Indian Railways. The Rail Tariff Authority, that was formed on 20th January 2014, has no say on the cost of tickets fixed by the IRCTC, thus implying that the Private Operator can fix the tariff at his whims and fancies. In addition, it has been noted that, private trains will have a 15 minute head start operating at a speed of 160 kmph.

II. Privatization of Stations: Privatization of stations on the Indian Railways started by leasing of Habibganj Station to M/s Bansal Pathways Habibganj Private Limited on West Central Railway in the year 2017 and discouraging the passengers the usage of Bhopal Station by halting the trains at Habibganj. Add-on facilities are being made available at Habibganj Station at a cost unlike other stations owned by the Indian Railways.(Please note that, all add-on facilities on the Indian Railway Stations are free or at concessional rates). This means that, under the guise of facilities Private Operators jack up the fares/tariff with no price control regime.

III. Corporatization of all the Railway Production Units and Closure of All Printing Presses: The Ministry of Railways has already issued orders to Corporatize the Indian Railway Production Units at different places. This will enable the government to sell away Railway Production Units to Private Operators in future and cut down Government employees. Earlier, orders were issued for closure of Printing Presses at Secunderabad(South Central Railway), Byculla(Central Railway), Howrah(Eastern Railway), Delhi(Northern Railway) and Chennai(Southern Railway). The Indian Railways, being the largest employer, is gradually cutting employment, is not healthy in this era of high unemployment.

IV. Leasing/Selling Indian Railways Land: Indian Railways holds large land bank and the government is eyeing to sell away/lease the huge properties, that once housed Railway Quarters, Community Halls, Railway Institutes, Playgrounds etc., with the help of Rail Land Development Authority(RLDA), citing the reason that, the land could be better utilized by private parties and revenue generated, but the fact is that, the Government is interested gradually selling away the properties a la BSNL. AIRF is against all such type of leasing and selling of Railway properties.

V. NITI Aayog: NITI Aayog has been a stumbling block for the Public Transporter. On perusing various Draft Documents, available on the NITI Aayog website, we have noted the following objectionable issues that are clear indicators for privatization of the state-owned Public Transporter:-

A. As per Draft Document of Presentation on the Salient Features of the Project available on the NITI Aayog website, i.e., Presentation.pdf

i) Under the head Operation and Maintenance(Page 10)

“Complete maintenance of trains by Concessionaire, Deploy Crew(Driver and Guard), Option to second from the Indian Railways, Concessionaire to provide training, deploy other personnel – Trains and Depot, procure and install requisite Machinery/Plants for maintenance.”

AIRF’s Comments: We oppose to this clause and will not accept deployment of the Crew by the Concessionaire. Indian Railways must install Plant and Machinery and deploy, employ and impart training to personnel for the upkeep of the trains.

ii) Under the head Key Performance Indicators(Page 11)

“For delay due to Authority – Damages payable by the Authority”.

AIRF’s Comments: with the increasing traffic and track congestion; Indian Railways cannot guarantee availability of clear path for the trains operated by the Private Operators, consequently, Indian Railways might end up paying huge damages, leading to heavy losses to already beleaguered lifeline of the Nation.

B. As per Draft Document of Project Information Memorandum(PIM), available on the NITI Aayog website, i.e., Draft_PIM.pdf(Page 1, First Paragraph)

i) “Ministry of Railways and National Institution for Transforming India(NITI) Aayog, Government of India are spearheading participation of private entities in operation of passenger trains on 100 routes.”

AIRF’s Comments: Contrary to repeated assurances given by the Ministry of Railways, the above statement clearly indicates that, Ministry of Railways, in coordination with the NITI Aayog, is spearheading participation of private entities in operation of Passenger Trains on 100 routes, indirectly encouraging Build, Own, Operate and Transfer(BOOT) Mechanism.

C. As per Draft of Request for Qualification(RFQ) Document, available on the NITI Aayog website i.e., Draft_RFQ.pdf(Request for Qualification for Passenger Train Operations).

i) Under 1.1.2(Page 8):

“The selected bidders, who are either a company incorporated under the Companies Act, 1956/2013 or undertake to incorporate, as such prior to execution of the concession agreements(the “Concessionaire”) shall be responsible for designing, financing, procurement, operation and maintenance of the Project(s) under and in accordance with the provisions of a long term concession agreement(s) (The “Concession Agreement”) to be entered into between the Concessionaire and the Authority in the form provided by the Authority as part of the Bidding Documents pursuant here to.

AIRF’s Comments: Handing over Operations and Maintenance of train sets and the infrastructure thereof to Concessionaire is not acceptable and AIRF opposes this decision of NITI Aayog/Ministry of Railways.

ii) Under 1.1.3(Page 8):

“The scope of work of a project will broadly include Designing, Procurement, Financing and Operation and Maintenance of Passenger Trains, either with distributed power or through power heads, comprising a minimum of 16 coaches (the “Trains”) on selected routes with the right to determine and collect the fares in terms of the Concession Agreement. The 100 origin destination pairs have been grouped into 12(twelve) clusters such that each cluster would require about a minimum of 12(twelve) Trains (the “Cluster”). The details of 12(twelve) Clusters are in the Project Information Memorandum at the Authority’s website www.indianrailways.gov.in. The Concessionaire shall procure these trains, as per the specifications and standards provided in the Concession Agreement, at its own cost and expense.

AIRF’s Comments: Handing Over Operations and Maintenance of train sets and the infrastructure to Concessionaire is not acceptable and AIRF opposes this decision of the NITI Aayog/Ministry of Railways.

iii) Under 1.2.9(Page 11)

“The Concessionaire shall, in consideration of its investment and services, be entitled to levy and collect fare from the users of the Project and also raise other revenues in accordance with the Concession Agreement.”

AIRF’s Comments: Rail Tariff Regulatory Authority was set up to “…. not only consider the requirements of the Railways but also engage with all stake-holders to usher in a new pricing regime through a transparent process”. Now, the whole purpose of setting up the Rail Tariff Regulatory Authority stands defeated. None of the stakeholders or the Rail Tariff Regulatory Authority were consulted while fixing tariff for Lucknow-New Delhi Tejas Express that was inaugurated on 04th October, 2019. Thus, Private Operator is collecting fare with profitability being the sole aim.

D. As per Draft Concession Agreement – Guiding Principles Document available on the NITI Aayog website i.e., Draft_MCA.pdf

i) Article 3(Page 27, Item 3.1.2)

(a) Procure, Operate and Maintain the trains in accordance with the provisions of this Agreement.

AIRF’s Comments: Handing over Operations and Maintenance of train sets and the infrastructure to Concessionaire is not acceptable and AIRF opposes this decision of the NITI Aayog/Ministry of Railways.

(b) Demand, collect and appropriate fare from the users liable for payment of fare for using the trains or any part thereof and refuse entry to any user, if the fare due is not paid.

AIRF’s Comments: Rail Tariff Regulatory Authority was set up to “…. not only consider the requirements of the Railways but also engage with all stake-holders to usher in a new pricing regime through a transparent process”. Now, the whole purpose of setting up the Rail Tariff Regulatory Authority stands defeated. None of the stakeholders or the Rail Tariff Regulatory Authority were consulted while fixing tariff for Lucknow-New Delhi Tejas Express that was inaugurated on 04th October 2019. Thus, Private Operator is collecting fare with profitability being the sole aim.

ii) Article 14(Page 60) under main head Training & Deputation of Crew Clause 14.1.1

“The Crew for the Trains may either be provided by the Concessionaire or may be taken on seconded from the Government on deputation. As per clause 14.2.3 The duration of training courses shall normally be for a minimum period of 03(three) days and a maximum of 24(twenty four) days”.

AIRF’s Comments: It is amply clear that Crew will be provided by the Private Operator and with a minimum training of just 03(three), thus compromising with the safety of the passengers travelling by the private trains.

iii) Article 14(Page 60) under main head Training & Deputation of Crew Clause 14.3.1

“Should the Government, in its sole discretion, permit such use, the Concessionaire shall make payment of an amount of Re.1(Rupee one) as charges for the use of the training f acility”.

AIRF’s Comments: On what basis the Concessionaire is charged just Re.1(Rupee One) for the use of training facility? How long will the training facility be available to the Concessionaire?

iv) Article 17(Page 66) under main head Operations & Maintenance Clause 17.1

“The Concessionaire shall maintain the Trains supplied in accordance with the provisions of this Article 17, the Specifications and Standards, the Maintenance Manual and the Maintenance Requirements(the “Maintenance Obligations”)”.

AIRF’s Comments: We are of the view that, Maintenance Activities must not be handed over to Concessionaire. Being a responsible Trade Union we oppose this vehemently.

v) Article 17(Page 71) under main head Operations & Maintenance Clause 17.16.1

“The Concessionaire shall, at all times, operate the trains in accordance with Good Industry Practice”.

AIRF’s Comments: Operations by Private Operator is not acceptable.

vi) Article 18(Page 74) under main head Safety Requirements Clause 18.3.2

“The Concessionaire shall impart safety training to its employees and shall at all times be responsible for observance of safety procedures by its staff, contractors and agents.”

AIRF’s Comments: The Concessionaire must necessarily impart safety training to the employees on deputation and should not be permitted to employee anyone from open market. Recruitment must be made by the Indian Railways only.

vii) Article 19(Page 78) under main head Monthly Fare Statement Clause 19.7

“Monthly Fare Statement During the Concession Period, the Concessionaire shall furnish to the Government within 07(seven) days of completion of each month, a statement of fare substantially in the form set-forth in Schedule – J(the “Monthly Fare Statement”). The Concessionaire shall also furnish to the Government such other information, as the Government may reasonably require at specified intervals in discharge of its statutory functions”.

AIRF’s Comments: Rail Tariff Regulatory Authority was set up to “…. not only consider the requirements of the Railways but also engage with all stake-holders to usher in a new pricing regime through a transparent process”. Now, the whole purpose of setting up the Rail Tariff Regulatory Authority stands defeated. None of the stakeholders or the Rail Tariff Regulatory Authority were consulted while fixing tariff for Lucknow-New Delhi Tejas Express that was inaugurated on 04th October 2019. Thus, Private Operator is collecting fare with profitability being the sole aim.

viii) Article 25(Page 92) under main head User Fare Clause 25.1.1

“The Concessionaire shall have the sole and exclusive right to demand, collect and appropriate fare from the users for the use of the trains in accordance with this Agreement, on and from the date of commencement of operations of the trains, in accordance with Clause 15.1, till the Transfer Date”.

AIRF’s Comments: Rail Tariff Regulatory Authority was set up to “…. not only consider the requirements of the Railways but also engage with all stake-holders to usher in a new pricing regime through a transparent process”. Now, the whole purpose of setting up the Rail Tariff Regulatory Authority stands defeated. None of the stake holders or the Rail Tariff Regulatory Authority were consulted while fixing tariff for Lucknow-New Delhi Tejas Express that was inaugurated on 04th October 2019. Thus, Private Operator is collecting fare with profitability being the sole aim.

ix) Article 25(Page 92) under main head User Fare Clause 25.2.1

“The parties hereto acknowledge and agree that the fare and the charges for the use of the Ancillary Facilities from the users shall be determined and/or revised by the Concessionaire at its sole discretion on a non-discriminatory basis”.

AIRF’s Comments: The fare must be audited, apportioned and approved by the Rail Tariff Authority to curb excessive fare hike by the Concessionaire. The fare charged by the Concessionaire should not exceed the fare of the Indian Railways operated trains for the same distance to avoid unhealthy fare competition.

VI. History has witnessed the ill effects of the privatization of a Major Sector, like Railways in some of the Developed Nations:-

a) United Kingdom: In the year 1989, during various businesses, under State Owned British, Railways were sold off and in 1993 the Railways were privatized. Since then services have totally deteriorated, and the innocent public are suffering even to this day by paying heavily to travel. Rail Industry is running in huge losses under Private Operators even to this day.

b) Argentina: It is the best example of ill effects of Rail Privatization, and after serious accidents; the Rail re-nationalization in the year 2015.

c) New Zealand: One more classic example is of New Zealand Railways, that was privatized in 1980, but due to heavy losses it was renationalized in 2008.

d) In all the Developed Nations, like Russia, Canada, France(51%), Germany, Ireland, Italy, Spain etc., after the World War II, Railways were Nationalized and are owned by the Government. It is clear that, Railways have flourished and are performing the best only under the control and ownership of the Governments, and after a detailed study and exercise, it has been proved and concluded that, privatization experiment has failed miserably in UK and Argentina. Unfortunately, innocent populace of UK and Argentina are suffering due to the bad decisions taken by their earlier governments. It would be wise for the Government in India to stop following the British Policies, at least after 72 years of Independence.

Most importantly, Safety of 23 million passengers will be compromised by handing over the lifeline of the Nation into the hands of the IRCTC, Ambani, Adani or Visconsin and like as we have experienced in the Telecom Sector, wherein Jio has now turned the tables on the customers by hiking tariff suddenly. Thus, we request your goodself to stop Privatization/Corporatization of the Indian Railways immediately.