Fuelled by the need to make huge investments in railways infrastructure, railway minister Lalu Prasad wrote in his desire to involve the private sector in Railway Budget 2006-07, which he presented on Monday.
In a move that could attract ire from political allies and foes alike, he expanded the scope of private sector participation to include the modernisation of railway stations, manufacturing of coaches and wagons, and developing the proposed high-speed passenger (train) corridors. All these could entail an investment of Rs73,000 crore over the next five years. Indian railways also plans to involve the private sector in the development of warehouses, logistics parks, and budget hotels and to create relevant IT solutions.
The Left parties opposed Lalu’s emphasis on private sector participation and investment, with CPI(M) leader Sitaram Yechury insisting that any outsourcing of the railways’ core function could prove a safety hazard. Vijay Kumar Malhotra, BJP spokesperson said the emphasis on private sector participation could “cost lakhs of workers their jobs.”
Public-private partnership (PPP)—the term used to describe private sector investment in areas that were previously completely government funded—has always wider political connotations because of Indian railways’ position as the country’s largest public sector employer.
“I am not in favour of blind privatisation of the railways nor in PPP a compulsion or fashion for us. We are seeking partnership with the private sector on the terms that are of interest of railways and our customers,” Lalu emphasized.
Last year, while presenting the Railways Budget, Lalu announced that the private sector would be involved in activities such as catering, sanitation, and examining tracks for wear in some stretches.
On Monday, he claimed that this had helped railways reduce its “losses of more than Rs1,000 crore.”
In an earlier interview with Mint, an executive director at Indian railways had said that the need for funds was not the sole reason for inviting private participation and investment. Indian railways needed world-class technology, he had said.
The railways ministry has already identified 19 stations for private sector involvement.