●Request for Qualifications (RFQ) towards privatisation of railways
•Recently, the Ministry of Railways has taken the first step towards privatisation of railways by inviting Request for Qualifications (RFQ) to private players for operation of passenger train services
•Under this at least 151 modern trains will be introduced and 109 pairs of routes will be planned out for private train operations.
•Train sets have to be brought by private operators and maintained by them.
•Fares in private trains will be competitive and prices on other modes of transport like airlines, buses have to be kept in mind while fixing the fares
[The project will bring private sector investment of about Rs. 30,000 crore.]
•Induction of modern technology and reduction in transit time and the demand-supply deficit in train tickets among others
are reasons behind privatisation
•According to the 2019-20 data, the Railways ferried 8.4 billion (840 crore) passengers in 2019-20, about five crore passengers could not be accommodated, meaning their wait-listed tickets were dropped.
•During the busy seasons/summer season nearly 13.3% passengers were not able to get confirmed reservations.
•Private participation in passenger train operations will only be 5% of the total operations of Railways. 95% of trains will still be run by Indian Railways
•There is fear that it will lead to increase in fair prices of rail travel and job losses.
•It will harm the interest of marginalised communities (Scheduled Castes, Scheduled Tribes and Other Backward Classes), who get reservation under the government jobs.
•Currently there is no reservation in private sector employment..
•It is important to modernize the railways, so measures must be taken to reimburse the social costs speedily so that resources of the railways are better allocated and facilities are upgraded from time to time.
•Privatisation of railways operations will require a new institutional framework where infrastructure will remain as a government’s monopoly while there would be a market of service providers.
•Core Railways functions can be Corporatizied rather than privatized.
•Corporatization refers to the restructuring or transformation of a state-owned asset or organization into a corporation. These organizations typically have a board of directors, management, and shareholders.
•However, unlike publicly traded companies, the government is the company’s only shareholder, and the shares in the company are not publicly traded.