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Business News/ Opinion / Views/  Opinion: Public tracks, private services
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Opinion: Public tracks, private services

To the extent that this is about private operations, rather than wholesale privatization of railway assets, it is welcome

There is no conclusive empirical evidence that private companies always perform better than their public counterparts. (HT )Premium
There is no conclusive empirical evidence that private companies always perform better than their public counterparts. (HT )

The Indian Railways has revived a plan to invite private participation in the operation of some of its train services. The focus of this exercise will be on low-congestion and tourist routes. While private partners has already taken on the refurbishment of stations, corridors and transmission lines via partnership deals, the endeavour to get private companies running trains could potentially raise the quality of service and enhance efficiency, aspects on which the Indian Railways have been at the receiving end of some scathing criticism. To the extent that this is about private operations, rather than wholesale privatization of railway assets, it is welcome.

Privately run operations on some routes may also act as spur for the state-run service to up its game. It could be done. There is no conclusive empirical evidence that private companies always perform better than their public counterparts. Aiming for commercial success may have its rewards, but the railways in India are more of a public service (with passengers subsidized by freight traffic). They allow the poor to travel long distances at low cost and thus serve an invaluable old purpose: of having Indians in all their merry diversity mingle with one another aboard these clunky carriages.

Outright privatization of the Railways would not only hurt its ability to meet larger non-commercial goals, it is a terrible idea even within the framework of a market economy. All the tracks, stations and other infrastructure belong to the people of India. Having once been laid painstakingly, little of it can be replicated now by another operator. Should public railway assets be privatized by way of an ownership transfer, it would amount to the creation of a private monopoly—with no rival to regulate its behaviour. Indeed, any government undertaking that cannot be disciplined by market competition needs to resolutely stay publicly owned—and answerable to Parliament.

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Published: 19 Jun 2019, 05:33 PM IST
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