Oppose the Plans of the Capitalist Class to Privatise the Indian Railways!

Kamgar Ekta Committee has brought together several workers' organisations and progressive organisations to initiate a widespread campaign against the bourgeoisie's program of privatisation of Railways. In the course of this campaign, the following organisations - Kamgar Ekta Committee, Airport Authorityof India Employees Union, Air India Service Engineers’ Association, All India Bank Employees’ Association, All India Loco Running Staff Association, All India Guards’ Council, BEST Workers Union, Ladaku Garment Mazdoor Sangh, Mumbai Municipal Mazdoor Union, Western Railway Motormen’s Associations, Lok Raj Sangathan and Purogami Mahila Sangathan - have released a leaflet which MEL is publishing here

Brothers and Sisters,

On Dec 25, 2014, the PM Narendra Modi addressed workers at Diesel Loco Works, Varanasi and said he wanted to make clear to all Indian Railway workers and the Indian people that the railways would never be privatised, and not to believe the rumours being spread.

However contrary to this assurance, this Government has been working very hard behind the scenes to ensure that the privatisation takes place as fast as possible! The following are the various steps that have been taken so far.

A)           In August 2014 Modi government announced that 100% FDI will be allowed in Railways. Soon after that, in Nov 2014, the Railway Board and a Cabinet Panelidentified 17 key areas where 100% FDI will be allowed. It is to be noted that sofar no foreign direct investment was allowed in Indian Railways (IR) due to security risks.This government completely changed this.

Among the areas where 100 % FDI will now be allowed are:

i)             High Speed Train Projects, involving those trains which will run above 250 Km/hr speed. These will have no connection or link with any existing railway line or route. The operators will have complete freedom to run and maintain these routes; the Government will also support them with resources and money.

ii)            Rolling stock procurement and maintenance: Diesel and electric engines and coaches and wagons can be made by foreign companies in India. Previously they used to be made by locomotive works owned by Government of India and under the Railway Board.

iii)           Dedicated freight lines on a Joint Venture and/or public private partnership (PPP) model. Private Trains on certain lines will also be allowed from now on.

iv)           Suburban corridor projects through PPP: New suburban corridor projects will bepermissible when launched through PPP route by Railway Ministry. The developer can construct, maintain and operate the corridor within the concession period.

v)            Technological solutions for manned and unmanned level crossings (Construction and maintenance of ROB (railway over bridge) /RUB (railway under bridge) /Limited Height Subway)

vi)           Technological solutions to improve safety and reduce accidents (Installation and maintenance of Asset failure detection systems (Track/ OHE/ Rolling Stock/Signalling etc.)

vii)          Testing facilities and world class laboratories for experimenting new technology

viii)         Setting up Railway Technical Training Institutes

ix)           Construction of world class passenger terminals and renovation/maintenance of existing stations

x)            Creation of Freight terminals/ Logistics Parks in strategically important locations, etc.

In line with the above proposals the Railway Minister has already given the approval for building two high value diesel and electric locomotive manufacturing plants with 100% FDI.These will be at Madhepura and Marhora in Bihar at a cost of Rs. 1200 crores each...

Also the Railway Minister recently held a meeting to appraise investors of the kind of models and projects on offer. Among the companies that have so far expressed interest in the ministry’s PPP initiative are Reliance Infrastructure, Larsen & Toubro, Siemens, AdaniPorts, GMR, Tata Infrastructure, Gammon, Jindal Steel and Power, JSW, Bombardier, GE, Alstom, Electromotive Diesel, Bharat Heavy Electricals, NMDC, HSBC and JPMorgan.As can be seen, the list includes foreign as well as Indian multinational companies.

B) Forfurther accelerating the privatisation of Indian Railways(IR), a seven member committee, under the chairmanship of Bibek Debroy, an economist and a member of Niti Ayog, was constituted in Sep 2014. Other members of the committee includea former cabinet secretary, a former chairman of a multi-national company in India selling shampoo and detergents, a former managing director of national Stock Exchange, and a former financial commissioner of IR.

Looking at the background of the members of the Committee we can imagine what will be direction of the recommendations of the committee – that IR should be run as a commercial profit driven organization with no social obligations, IR should be run like a company with minimum number of people, private sector must be allowed to compete with IR to improve its efficiency and reduce cost of operations, all capital requirements should be raised from the financial market and government should not be required to provide any funds, passenger fares and goods freight rates should be fixed so as to give attractive return on investment, wages should be linked to performance, loss-making routes and operations should be closed, etc.

Indeed as expected it gave the following recommendations among many others in its draft report:

Private entry into running both freight and passenger trains in competition with IR should be allowed and private participation in various Railway infrastructure services and non-core activities like production and construction, should be encouraged by the Ministry of Railways.

Dividing of IR into two independent organizations: one, responsible for the track and infrastructure and another that will operate trains. This means that the existing track systems will be privatised, and that multiple private operators would be able to run their services on them!

iii) Amendment in the Indian Railways Act to allow the levy of tariffs by private operators without administered tariff-determination and fares being left to the market

iv) Handover the commercial operations of Rajdhani/Shatabdi train to private parties for an upfront/annual premium.

v) In addition to Madhepura and Marhora, private entry should be permitted for the proposed units in Rae Bareli, Bhilwara, Sonepat, Chhapra, Jalpaiguri, Kanchrapara and Kerala.

vi)           Immediate corrective steps should be taken to rationalize expenditure on salaries and wages of existing employees by right sizing IR through rationalization of manpower.

vii)Reduce the number of employees by (a) carrying out an exhaustive independent work study to arrive at the optimal number of staff required and laying down yardsticks for different activities(b) reducing number of peons, khalasis and other such categories through rightsizing and outsourcing; (d) eliminating a number of obsolete Group ‘D’ categories that are no longer relevant (box porter etc.) and (e) taking steps to increase the output of such staff at the relatively lower levels whose functions are linked to safety (e.g. gangmen, trolley-men etc. through multi-tasking, adoption of better technology, retraining and efficiency enhancing measures etc.)

viii) Indian Railway should focus on core activities to efficiently compete with the private sector. It should distance itself from non-core activities, such as running a police force, schools, hospitals and production and construction units.

ix) Subsidies should be targeted towards those who need them. Link Aadhar numbers for passenger when tickets are purchased. Subsidies on passenger fares to be reimbursed directly into bank accounts, for those who are targeted BPL. Such subsidies must be borne by the Union government.

xi) Suburban railways should ideally be hived off to State governments, via the joint venture route. Until this is done, the cost of low suburban fares, if these fares are notincreased, must be borne by State governments on a 50/50 basis, with MOUs signed with State governments for this purpose.

The DebroyCommittee claimed it had studied the experience of many countries which had privatised their rail systems, such as Britain, Germany, Japan, etc. before arriving at its recommendations!

Brothers and Sisters,

We have to oppose the privatisation of the Railways because

i) They want to hand over the vast infrastructure, land and labour that are represented by the Indian railways at cheap prices to the capitalists. This is the realaim of all privatisations, though the claim is that doing so will make it more efficient. The process of privatisation has been pursued by all the parties that have been in power for several decades. The Indian Railways was built out of the savings of us, the Indian people. It belongs to usand we will not allow this.

ii) We cannot allow a profit centric approach in running the Indian Railways. When the British left India, there were 54000 km of railway routes. Now after 60 years of Independence, the route length has only increased by 11,000 km to 65000 km, while the track length has increased to 115,000 km mainly by doubling and trebling tracks on existing routes. Hence vast regions of our country remain unconnected by rail. It is a known fact that a railway line acts as a catalyst to growth in any region. This also means that successive governments have not built much additional route capacity and have not worked to develop all our different states and regions in a uniform manner. This has created huge imbalances, with many regions and states being underdeveloped and people from these states having to leave their homes and hearths and migrate to far away places in search of a livelihood. Handing over the railways to private capitalists will only aggravate this problem as they will not be interested in putting the necessary new lines which require huge capital but will try to milk the existing old lines as much as possible which has been handed over to them at cheap rates.

iii) The government’s offer to private capitalists to run privatisation projects on the PPP model is nothing but giving a guarantee to them of an assured rate of return(profit) on their investment. This means that the public(i.e. government)private(i.e. the capitalist) partnership will assure a high rateof profit on whatever money the capitalists put into the enterprise. This is highly beneficial to them since on their own investment, they are not assured of a fixed rate of profit due to competition as well as market swings and uncertainties. The “assured rate” will either come from the travelling public who will have to bear increased costs or else from the Government’s coffers which indirectly again means that the working people have to pay through higher taxes, etc.

iv) In support of its recommendations for privatisation, the Debroy Committee has cited the examples of privatisation of English, German, and Japanese railway systems. There is no doubt that privatisation has immensely benefitted the capitalists of those countries. However the Committee is hiding the fact that privatisation has been at the cost of the railway workers and people in those countries, and has been opposed by them. The monthly season tickets in Britain is 10 times that of France where the rail system is run by the government. An opinion poll recently conducted in Britain showed that 75% of the people wanted a renationalisation of British Rail!

v) Moreover there is an acute need for expanding the rail network in India so that it caters to far-flung areas that may not be profitable. A large amount of capital is required to lay this new network. The capitalists of course never cater to the needs of the people.

Brothers and Sisters,

The conditions in which people of our country have to travel, as well as the condition of the workers of IR are among the worst in the world, both in terms of safety as well as comfort. No one can deny that the Indian Railways require to be developed. However, the direction should be in the interest of all the people of India, those living in far flung places as well as cities, passengers as well as those who work in the IR. The direction in which the successive governments are moving is exactly the opposite.

The Modi government’s moves to accelerate the privatisation of Indian Railways are accompanied by further attacks on the Indian people, such as amending the labour laws to allow easy hire and fire, privatisation of banks, insurance and pension funds (which is nothing but handing over the accumulated savings of the Indian people to the capitalists), amending the land acquisition laws to allow for easier grabbing of peasants’ land as well as urban land, and a host of other measures being pushed under the slogans of ease of doing business and “Make in India”. Just like the previous governments, this one too does everything in its power to serve the big capitalists, Indian as well as foreign.

The working class has the duty to oppose these anti-people and anti-social plans. We have at the same time the duty to put forward to all the working and oppressed people of India an alternate plan and program for the development of our country. This plan and program will have the aim of fulfilling the needs of the working people of India and not that of a tiny minority of exploiters.


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Defeat Privatisation    May 1-15 2015    Struggle for Rights    Privatisation    Economy    

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