Existing production units of the Indian Railways such as locomotive and coach factories could soon see an exodus with their best engineers and managers leaving for better jobs. And ironically, most of these employees could end up in new joint ventures being floated by the railways with private sector firms.
The move to set up these joint ventures in which the railways will have a minority stake has already come in for some flak from the chairman of the Railway Parliamentary Standing Committee, Basudeb Acharia, who says that they are unnecessary because existing units have the capability to deliver all the coaches and wagons required.
“This move (to set up new units) will render existing units sick,” he adds.
A recent report submitted to the Railway Board, Indian Railways’ top decision making body, by PricewaterhouseCoopers, a consultant for the proposed production units, says the joint ventures could increase efficiencies by paying Group A and Group B officers 200% and 100% more than they currently earn. Group A and Group B are categories of employees in Indian Railways.
Two officials of Indian Railways, who did not wish to be identified, independently said this proposal was part of the consultant’s report. However, the PricewaterhouseCoopers consultant in charge of the project denied that the firm had made any such recommendation in its report.
The recommendation is significant because it suggests that the new joint venture companies being set up hire people from the railways and pay them more.
According to senior railways officials, production units such as the Diesel Locomotive Works (Varanasi, Uttar Pradesh), Chittaranjan Locomotive Works (Chittaranjan, West Bengal) and Integral Coach Factory (Chennai, Tamil Nadu) will have to compete with the new outfits to retain their best talent.
“The new units will bring in competition. All the (existing) production units will have a competitor each and the railways will have to fight to keep their staff,” says former railway board chairman J.P. Batra.
The Railway Board is currently bound by its own decision to not release officers on deputation to other projects after it lost hundreds of engineers and officers to the Delhi Metro Rail Corp.
The railways is already facing a shortage of engineers and managers. It has around 6,000 Group A officers, of whom around 600 are on deputation with public sector firms that fall under the railways, such as IRCON International Ltd, RITES and Indian Railways Catering and Tourism Corp. Indian Railways actually needs at least double the number, says a senior official.
Overall, the railways employs around 1.4 million people, carried over six billion passengers last year and operates around 9,000 passenger trains and 5,000 freight trains. Given its size of operations, it also employs the largest pool of engineers in the country.
To meet a surging demand for more coaches and wagons, the railways decided in this years Railway Budget to set up new production units in which the ministry will hold a 26% stake with the likely majority partners being large companies such as GE Transportation, Bombardier Transportation and Siemens AG.
“Without staffing support from the railways, these private players will not be able to run the new units,” says an Indian Railways officer, who did not wish to be identified.
Railways officers have asked the Department of Personnel and Training to allow them to participate in projects outside the ministry. Meanwhile, the Indian Railway Promotee Officers’ Federation has also suggested to the ministry that they be allowed to spend up to five years in the private sector.