Modi led-government is planning to take one more step towards privatisation of the Indian Railways while continuing to claim that it would never be privatised. Corporatisation and Public-Private-Partnership have been the frequently used methods lately towards privatisation of the Indian Railways. Under corporatisation, an existing activity or asset is separated from the Indian Railways and handed over to a new public sector company. Later on the shares of the new public sector company are sold part by part to capitalists.
Indian Railways has an operational electrified network of 25,000 route km. Electric locomotives draw power from power transmission lines running along the track. It now proposes to transfer the ownership of this entire network of power transmission lines to a separate company. The new company is expected to pay Rs. 25,000 crore to the Indian Railways for getting the ownership of these lines. The Indian Railways will then pay an annual fee to the new company for using these power lines.
After some time the shares of this new company will be sold part by part. The selling of shares of already corporatized operations of the Indian Railways has already begun. Just last month a part of the shares of RITES, the consultancy company of the Indian Railways, were sold. Likewise, it is proposed to sell a part of shares of the Indian Railway Finance Corporation (IRFC) during this financial year. Locomotives, passenger coaches and goods wagons, required by the Indian Railways, are bought by IRFC and leased to the Indian Railways for use. During 2016-17 itself, IRFC funded purchase of 608 locos, 2280 passenger coaches and 10,000 wagons valued at Rs.14,281 crore. By the end of Mar 2017, IRFC had funded the acquisition of 8,998 locomotives, 47,825 passenger coaches and 2,14,456 wagons valued at Rs 1,51, 319 crore. All this rolling stock is owned by the IRFC and not by the Indian Railways. If the IRFC is privatised, all this rolling stock will be under the control of the private entity! Now that power lines are proposed to be corporatized and later on privatized, even power supply to run trains will come under private control.
The government is misleading people by claiming that only ownership is being transferred from one public sector to another public sector company and therefore corporatisation is not privatisation. It is hiding its real intentions behind this move which is to privatise the Indian railways step by step stealthily.