Privatizing the railways

The talk was on the air for quite some time that the Government wants to privatize the Railways. Now it is official. In an interview to The Hindu, Railway Minister Piyush Goyal has confirmed that the Government wants to “give operations of railway lines to private players for enhancing competition.” The Minister did not clarify competition with whom, The Indian Railways are wholly owned by the Government of India. Inviting private players to operate railway lines for ‘competition’ can mean only one thing – that the Government wants private players to compete against itself.  This seems self-contradictory but, well, there is the Minister’s comment.
The Railway Minister has gone on to say that the Government intends to ‘lease out’ at least a hundred railway stations to private players. An earlier attempt for leasing out stations, he said, evoked ‘lukewarm response’ from the private sector. This time, to make the leasing more attractive, the Government has decided to increase the lease period from 45 to 99 years. Private operators who take the lease will be allowed to ‘sub-lease’ stations to others for increasing their investment value and mortgaging assets to enable banks to give low-cost funds. The Minister has not clarified what will be the process of sub-leasing and whether the Government will have a say in it or the sub-lessees will be chosen by the lessees according to their sweet will. Private parties operating railway tracks and taking over railway stations seem to be the first step to privatizing the railways. This fits in with the economic philosophy of the present government which is understood to be interested in privatizing the banking sector as well.
If the Government hands over the railway tracks and stations to private operators, then it will be able to wash its hands clean of any responsibility for railway accidents and paying compensation to the kith and kin of the dead and the injured. The Government has not clarified the eligibility criteria for the private parties who will make bids for operating tracks and stations. This becomes more important if the lessees are allowed to bring in sub-lessees. The Railways are the lifeline of the nation, carrying goods and passengers through its huge network spread across the length and breadth of this vast country. Handing over the Railways to private operators, whether gradually, step by step, or at one go, will be detrimental to the interests of the country. The Government should think many times and seek the opinion of specialists before taking a final decision.

Monday, 25 September, 2017