Railways will continue to be owned by government of India -No Privatization

No Privatization of Railways; it will continue to be Owned & Managed by GOI: Suresh Prabhu

New Delhi: Notwithstanding recommendation by government panels, Railways Minister Suresh Prabhu has outrightly ruled out privatisation of the public transporter, saying it was a “bogey” being raised by those who do not want any change or by those who do not understand the importance of change.

He further said the concept of privatisation gives confusing signals and envisages the possibilities of ownership transfer of an enterprise to a different entity or management which was not possible in railways.  “Railways will continue to be owned by government of India, managed by government of India, he said and further added, “we want change not for the change in ownership. We do not want change for somebody to run the precious assets of railways. We want to bring in private capital or technology to improve the functioning of Indian Railways so that railways become more valuable and run into profits,” Prabhu told PTI in an interview. For example, If you wants to buy, revamp or carry out some restoration activity to your dilapidated house which is going to collapse shortly, however you have no money in hand, then what you will do?  You will either resort to borrowing money from some Banks or Financial Institutions and execute the job in time and reconstruct your house, and starts repaying the loan amount through regular EMIs or otherwise. In the same way, the Government of India is considering FDI and PPP models to reconstruct the antiquated and financially bankrupt Indian Railway system. India needs FDI model because we need Technology as well.  The funding organisation cannot bring in technology and the Companies cannot act as Banks. Hence we are keen to FDI / PPP models.  So why someone who doesn’t understand what Government of India is going to do should resort to undue cry,” he asked.  “Why those people have not raised their voices when the previous Governments have sufficiently killed the mighty Indian Railways and drove it to great financial bankruptcy for their political agendas?  he asked.

Prabhu’s remarks come in the backdrop of raging debate on the privatisation of railways with the government-appointed committee headed by economist Bibek Debroy recommending corporatization of the loss-making public transporter and suggesting that the ministry of railways be only responsible for policymaking and private players should be allowed to run passengers and freight operations.

According to the latest CAG report on Railways, the Indian Railways was unable to meet its operational cost of passenger and other coach services and there was a loss of Rs 23,643 crore in the same during 2011-12 and is about to land in huge bankruptcy.

Asked about the reasons for opposing privatisation, he said, “Unfortunately this type of nomenclature is an ideological debate. This is unnecessary and unintended confrontation. What is meant by us is that we want to improve quality of service of railways.”

“So whatever brings better quality of service, better technology, better profitability has to be done with whatever means possible. If we can do it ourselves in-house then we should do it. If we realise that we cannot do it in-house then we must get it outside capital, outside technology and outside agency” but not with the transfer of ownership.

Privatisation, he said, “is a bogey being raised by those who do not want change” even if it is for improving performance and facilities.