Put efficiency on track

There is a strong case for unbundling the Railways into two independent organisations; one responsible for track and infrastructure and another for operating trains

AuthorPublished: 25th Jun 2019  12:00 amUpdated: 24th Jun 2019  7:50 pm

The government’s plan to invite private players to run trains on certain routes is a welcome move. Greater involvement of the private sector would lead to better infrastructure and improved amenities for passengers. The reason for the abysmal performance of Indian Railways is the gross mismanagement of resources as the state-owned behemoth earns just enough to cover its operational expenses. As a result, there are not enough resources to build new infrastructure, such as laying more tracks, adding coaches and wagons or even improving the existing ones. As opposed to the mismanagement in the form of stinking washrooms, lack of water supply and dirty platforms, it is expected that a private company will ensure better amenities. The Ministry of Railways is planning to invite private players through its ticketing arm Indian Railways Catering and Tourism Corporation (IRCTC) to run trains connecting popular tourist spots. Private partnership will also be sought for freight trains. The idea behind inviting private players is to ensure world-class facilities to the passengers while improving the overall quality of commercial trains. It is expected that the government may invite private players in a phased manner for running premium trains and begin with floating tenders for Rajdhanis and Shatabdis. The Bibek Debroy Committee, which was set up to suggest ways to mobilise resources and restructure the Railway Board, had recommended privatisation of rolling stock: wagons and coaches. Last year, Niti Aayog too had advocated for more private participation in the sector, including ownership of locomotives and rolling stock, to modernise railway stations.

Though there have been many attempts in the past to involve private players in the improvement of amenities and infrastructure at railway stations, the record has been patchy due to resistance from entrenched interests. There is a strong case for unbundling the Railways into two independent organisations; one responsible for the track and infrastructure and another that will operate trains. The segregation of infrastructure and operations has been done the world over. And, it leads to simplification of cost recovery for the money spent by the government in setting up the infrastructure. In fact, the Debroy committee looked at the restructuring experiences from multiple countries, including Japan, the UK, Germany, Sweden, Australia and the US. It was found that the entry of competitors lowered the prices and led to better services. The ideal option for the government would be to retain the rail-track and infrastructure as a publicly-owned monopoly while opening up rolling stock operations for passengers and freight to the private sector. There must be open access for any new operator who wishes to enter the market for operating trains with non-discriminatory access to railway infrastructure and a level playing field.