Modi all set to PRIVATISE the lifeline,Indian Railway!
Debroy committee suggests corporatization of Railways
Panel's interim report suggests separation of roles of operation, regulation and policy making in the sector
Excalibur Stevens Biswas
[PDF]Interim Report of the Committee for Mobilization of ...
Policy making is not to concern the cabinet and legislation has to do nothing with the Parliament.The total Privetization,Total FDI and Total disinvestment TRISHUL of RSS Fascist governement of Hindu streamlined on making in Gujarat model.
An official panel's recommendation to allow private players in Railways has met with strong opposition from employees' union which has given a call for observing "black day" on June 30 across the country. "We have decided to observe black day on June 30 all over the country by wearing black badges," said Shiv Gopal Mishra, General Secretary, All India Railway Federation.
Terming it as a "clear roadmap for privatisation", Mishra said, "We hope that the Debroy report will not be accepted by the government."
However,Railway workers' union trashes Bibek Debroy report on restructuring
According to NFIR, it is not desirable to experiment with FDI and private players in infrastructure without building massive railway infrastructure first!
But as it happened since 1991,trade unions guided by corporate funded Parliamentary politics may not resist PRIVATIZATION of Indian lifeline which is virtually already PRIVATIZED as far as Railway services are concerned.
However,Scrap Bibek Debroy report on railway restructuring, say trade unions!
BAGULA expert committees consisting of private parties constituted and their reports are final for the KILL the Public Sector Units,PSUs selected for disinvestment.
Railway Minister Prabhuji just rolled the ball in the court and the game starts.However,Modiji with his dream project of bullet trains have already declared the war against Indian Railway which in no more so public as every thing is managed by private companies for example Ticket Booking,Track maintenance, infrastructre, passenger services,catering and so on.Only Operation and Signaling to be managed by Ralway employees and the drives and guards,ticket checkers have not lost their job and trains with Railway stations still remain public property.
Thus,the committee headed by economist Bibek Debroy has recommended corporatization of the railway board and separation of roles of policy making, regulation and operations suggesting that the ministry of railways be only responsible for policymaking.
In its interim report that has been put on the ministry's website for feedback, the committee suggested forming an independent regulator for economic regulation and a railway infrastructure company that will own the railway infrastructure, thus de-linking both from the railways.
Bibek Debroy is a permanent member of the NITI Aayog.
The Bibek Debroy committee on the proposed restructuring of Indian Railways (IR) has recommended private sector participation in projects and setting up an independent regulator to promote competition in the segment.Businee Standard reports.
The final report of the panel has not yet been given but is ready.
"It needs to be understood that this committee does not recommend privatisation of IR," the panel clarifies. "It does, however, endorse private entry, with the provision of an independent regulator," officials said the committee had said in its final report.
The final report of the panel has not yet been given but is ready.
"It needs to be understood that this committee does not recommend privatisation of IR," the panel clarifies. "It does, however, endorse private entry, with the provision of an independent regulator," officials said the committee had said in its final report.
The panel also said that if all its recommendations highlighted for the first five years -- creation of a independent regulator, reorganisation of the Railway Board, reorganisation of Group A railway services, revision of dividend policy and many others -- are implemented and issues related to social costs are addressed, the annual railway budget could be phased out. The Gross Budgetary Support (GBS) to IR could be mentioned as a paragraph in the Union Budget and no more.
One basic change between the interim and final report of the committee, officials said, is on the powers of rail general managers and divisional railway managers to choose the Railway Protection Force (RPF) and Railway Protection Special Force (RPSF). In both cases, the interim report had said this should be separated from the core function of IR, which is to run trains. However, in the final report, officials say the committee said the entire cost of the General Railway Police should be borne by the state government concerned. Else, GMs and DRMs should be given adequate freedom to choose between private security agencies and RPF for security on the trains.
Similarly, in the case of railway schools, the Committee suggested educational needs be met through subsidising their education in alternative schools, including Kendriya Vidyalayas and private schools, rather than hiring educationists on the rolls of IR.
For medical services, an official said the committee suggets GMs and DRMs and even other employees get the option of choosing either services offered through the Indian Railway Medical Services (IRMS) or privately empanelled practitioners.
"For preventive and curative health care of employees, the choice might be extended to the CGHS (Central Govt Health Scheme) framework and subsidised health care in private hospitals, which should not be restricted to referral services," the official said.
The committee also recommended expanding the powers of station managers, also known as station superintendents, and not limiting these to commercial powers.
It also gave a firm timeframe to achieve the recommendations, which are divided into one span of five years and another of more than five years. In the first five years, it suggested major initiatives like reorganisation of the Railway Board, creation of an independent regulator, reorganisation of Group 'A' railway services, revision of dividend policy, etc.
For the next five years, it envisages a scenario where IR has six production units, each headed by a GM, all production units are placed under a government Special Purpose Vehicle (SPV), whose directors are chosen through the Public Enterprises Selection Board, coaches and locomotives are produced in the private sector and the independent regulator resolves access to track issues for not only private train operators but also for IR zones, which compete with each other.
The panel said its recommendations had three pillars -- commercial accounting, changes in human resource (HR) policy and the independent regulator. The regulator will have quasi-judicial powers, with the functions of rate and safety regulation, fair access regulation, service standard regulation and licensing, and setting technical standards.
It also recommended bringing all the zonal construction organisations under the umbrella of one or more public sector units in the railways.
"The VII pay commission in 2016 would further push up the staff costs and pension costs, which will have serious financial implications on the railways. Thus, there is an urgent need to rationalise the manpower," the committee has said. Also, to ensure IR appropriates more money to the Depreciation Reserve Fund, the committee has recommended a review of the dividend policy and provides it a GBS net of the dividend payment.
Officials said the Debroy panel has also called for separation of social objectives and their costs – Rs 25,000 crore annually -- for IR from commercial considerations. The committee also asked for adopting the Kakodkar committee's recommendations to improve safety.
IR, it says, must also tap into extra-budgetary sources of funding such as multilateral funding agencies. And, change its investment strategy through ring-fenced investments in high-yield projects. Also, more remunerative activities like station development must be separated as SPVs involving the states.
One basic change between the interim and final report of the committee, officials said, is on the powers of rail general managers and divisional railway managers to choose the Railway Protection Force (RPF) and Railway Protection Special Force (RPSF). In both cases, the interim report had said this should be separated from the core function of IR, which is to run trains. However, in the final report, officials say the committee said the entire cost of the General Railway Police should be borne by the state government concerned. Else, GMs and DRMs should be given adequate freedom to choose between private security agencies and RPF for security on the trains.
Similarly, in the case of railway schools, the Committee suggested educational needs be met through subsidising their education in alternative schools, including Kendriya Vidyalayas and private schools, rather than hiring educationists on the rolls of IR.
For medical services, an official said the committee suggets GMs and DRMs and even other employees get the option of choosing either services offered through the Indian Railway Medical Services (IRMS) or privately empanelled practitioners.
"For preventive and curative health care of employees, the choice might be extended to the CGHS (Central Govt Health Scheme) framework and subsidised health care in private hospitals, which should not be restricted to referral services," the official said.
The committee also recommended expanding the powers of station managers, also known as station superintendents, and not limiting these to commercial powers.
It also gave a firm timeframe to achieve the recommendations, which are divided into one span of five years and another of more than five years. In the first five years, it suggested major initiatives like reorganisation of the Railway Board, creation of an independent regulator, reorganisation of Group 'A' railway services, revision of dividend policy, etc.
For the next five years, it envisages a scenario where IR has six production units, each headed by a GM, all production units are placed under a government Special Purpose Vehicle (SPV), whose directors are chosen through the Public Enterprises Selection Board, coaches and locomotives are produced in the private sector and the independent regulator resolves access to track issues for not only private train operators but also for IR zones, which compete with each other.
The panel said its recommendations had three pillars -- commercial accounting, changes in human resource (HR) policy and the independent regulator. The regulator will have quasi-judicial powers, with the functions of rate and safety regulation, fair access regulation, service standard regulation and licensing, and setting technical standards.
It also recommended bringing all the zonal construction organisations under the umbrella of one or more public sector units in the railways.
"The VII pay commission in 2016 would further push up the staff costs and pension costs, which will have serious financial implications on the railways. Thus, there is an urgent need to rationalise the manpower," the committee has said. Also, to ensure IR appropriates more money to the Depreciation Reserve Fund, the committee has recommended a review of the dividend policy and provides it a GBS net of the dividend payment.
Officials said the Debroy panel has also called for separation of social objectives and their costs – Rs 25,000 crore annually -- for IR from commercial considerations. The committee also asked for adopting the Kakodkar committee's recommendations to improve safety.
IR, it says, must also tap into extra-budgetary sources of funding such as multilateral funding agencies. And, change its investment strategy through ring-fenced investments in high-yield projects. Also, more remunerative activities like station development must be separated as SPVs involving the states.
Media reports:Angry about the recommendations of the Bibek Debroy-led panel, Railway trade unions are planning to launch mass demostrations and large scale rallies in protest. They are also demanding scrapping of the report that recommends "privatisation in the name of liberalisation".
"A bare perusal of the report reveals that the committee in the name of liberalisation has recommended entry of new operators into railway operations, that is, privatisation," said Guman Singh, President of National Federation of Indian Railwaymen (NFIR), which represents more than 80% of Indian Railways' over 1.3 million workers.
The federation's press secretary also said the unions' brass has given clear directions to its affiliates to arrange mass demonstrations, large scale protest rallies and press conferences to express the anger of the railway employees against the recommendations of the committee.
NITI Ayog member Bibek Debroy had on Friday submitted his report on the restructuring of the railway board and mobilisation of resources for railway projects to the rail ministry. He is also expected to meet Prime Minister Narendra Modi over the weekend to brief him about the recommendations.
While Debroy has recommended liberalisation of railways and sought to define liberalisation separately from privatisation in the report, he has also said that entry of private players into the system is already provided by the extant policy.
Trade unions fear any effort at bringing in private players into railway operations would jeopardise workers' jobs and negatively impact railways' financial health.
The Debroy panel has also recommended setting up an independent regulator, merging of the eight existing Group A railway services, rationalising of the workforce and restructuring of Indian Railwayson the lines of British railways.
Unions complain Debroy did not examine the actions of successive governments in starving the railways of investments and instead blamed the workforce for its problems.
NFIR said it is not desirable to experiment with FDI and private players in infrastructure without building massive railway infrastructure first and in his euphoria for a roadmap, Debroy ignored the shortcomings of European railways including the failed privatisation model of British Railways.
"Restructuring cannot be an exercise subjected to such a 'disastrously confused perspective' of connecting the current state of affairs with what is desired for the future," the union said in its comments on the report.
The other influential union, All India Railway Federation (AIRF) has also called for observing June 30 as "Black Day" in protest of the Debroy report. AIRF General Secretary Shiv Gopal Mishra termed the report as clear roadmap for privatisation and hoped its recommendations are not accepted by the government.
The committee recommends that the railway board function like a corporate board for railways. The chairman of the railway board should be like a chief executive officer, it said, and the composition of the railway board should be changed to five members (traction and rolling stock, passenger and freight business, human resources and stores, finance and PPP, and infrastructure) and two independent experts.
Suggesting decentralization of decision-making powers it says the head of each zone (general manager) must be fully empowered to take all necessary decisions without reference to the railway board.
The railway ministry had in September 2014 constituted this eight-member committee for the mobilization of resources for major railway projects and restructuring of railways under then railway minister D.V. Sadananda Gowda, who felt that the railway board had become unwieldy because of overlapping roles of policy formulation and implementation.
The Debroy committee's recommendations lay down the direction of the reforms required to turn around the national carrier.
"There should be clear division of responsibility between the Government of India and railway organizations. The ministry will only be responsible for policy for the railway sector and the parliamentary accountability and will give autonomy to the IR (Indian railways)," said the committee in its report.
The larger thrust of the recommendations is to make the railways attractive for private sector participation.
Apart from creation of an independent regulator and corportization of the railways, the Debroy committee recommends that the railways move away from non-core activities like production and construction, leaving room for private entry. It suggests separation of rail track from rolling stock with two independent organizations responsible for these.
"Private sector participation can be implemented in the form of service contracts, management contracts, leasing to the private sector, leasing from the private sector,concessions, joint ventures and private ownership," the report said.
Importantly, the committee has suggested the formation of a railway infrastructure company in the form of a special purpose vehicle that will own the railway infrastructure be created.
"The creation of such a railway infrastructure company makes the market for operating trains contestable," the report said.
Media reports:The Bibek Debroy committee's report on ways to restructure and modernise Indian Railways has come in for severe criticism from the leading employees union, National Federation of Indian Railwaymen (NFIR).
In a 32-page letter to Debroy, NFIR has trashed most of the recommendations, including introduction of foreign direct investment (FDI) and private partnership in operations, formation of a regulatory authority and revamping the railway board through its bifurcation, made by the NITI-Aayog member.
NFIR has alleged Debroy did not examine the actions of successive governments in starving the railways of investments and deliberately withholding passenger fare hikes through a decade. "For instance, when fares were raised and withdrawn during one Railway Budget, the loss was around Rs 7,000 crore. The organisation is not responsible for the investment-starved situation," the union said.
According to NFIR, it is not desirable to experiment with FDI and private players in infrastructure without building massive railway infrastructure first. It argues political compulsions and commitments are responsible for slowing down of the railway network and train speeds and not the railway workforce.
"In its euphoria to provide a new road map for the Railways, with private players pitching in, perhaps the committee has failed to go deep into these initiatives on the European railways, whose tariffs soared, and most of the rail systems such as the one in Britain still provide huge subsidies to infrastructure companies, which remain State-owned," the letter said.
The union also invoked British author and railway historian Christian Wolmar to highlight the failed privatisation experiment in the British Railways, which has been recommended by Debroy. Wolmar had stated that "privatisation and fragmentation had created a dysfunctional (British) Railways, as it was undertaken for ideological and financial reasons with little consideration of passengers.
Interestingly, the union has also claimed that either the inputs for the Debroy panel were hurriedly taken from the railway board or sufficient time was not spent in understanding what was supplied.
"For instance, a table at Page 66 of Debroy report wrongly shows Parbhani as another Division under South Central Railway, whereas it has only 6 Divisions-Secunderabad, Hyderabad, Vijayawada, Guntur, Guntakal and Nanded," NFIR contended.
Dismissing Debroy's argument in favour of increasing competition by introduction of new players, NFIR argued his report has ignored how, thanks to massive gauge conversion exercise since 1990s, Indian Railways has managed to successfully increase freight volumes without substantial increase in route kilometre.
"There are certain elements of discord and inconsistency within the report. For instance, it is stated the committee does not recommend privatisation of IR except in very specific non-core segments and goes on to state that privatisation is to be implemented as liberalisation' while deliberating on rationalising production of rolling stock, which is essentially a core segment of IR. This is basically the irony of the entire report," NFIR said.
The union has also cautioned against the negative impact of introducing PPP at a time when projects worth Rs 1.86 lakh crore to be implemented under the mode are virtually stalled. "Restructuringcannot be an exercise, which can be subjected to such a disastrously confused perspective of connecting the current state of matters with what can be actually and effectively desired for the future," the letter stated.
Criticising the Debroy panel for failing to understand the real reason for a regulatory body, NFIR has argued: "The necessity is perhaps of not a 'regulatory' mechanism but of an automatically processed routing-and-rating system in-built within the IR. Similarly, if pension liability is 'unbundled' from IR's liability, staff costs would sound almost menial."
The union has said Debroy panel missed the crux of the issue – unlike many other railways in the world, railways has not had a connection between the volume of freight carried on a line and the freight rate fixed for that line.
The letter also states that Debroy has also wrongly concluded that railways is to be freed from certain activities in order to concentrate on core business. It asks the committee to appreciate that self-sufficiency is essential in production and maintenance of locomotives and coaches and entrusting railways' activities to outside agencies would dilute quality of service.
Pl see the report:
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