Twist In The Tracks: What Does Encouraging Private Party Participation Mean For The Indian Railways?

Posted on October 13, 2014 in Politics

By Pradyut V. Hande:

The Indian Railways has received both praise and flak in unequal measures over the years. While on the one hand, it continues to remain the transportation lifeline for millions across the country, ferrying over 8900 million passengers every year; on the other hand, it has struggled as an integrated organisation to raise its standards of service and quality to a world class benchmark. Consequently, the end consumer has had to pay the price (both monetary and non-monetary) for its “shuddh desi” modus operandi. It’s seemingly lackadaisical approach, gross mismanagement of allocated resources, disinclination to embrace change and lack of customer focus has seen it grind out quarter after quarter of mounting losses. The low fares and provision of cross-subsidies are partly to blame for that worrying trend. However, this is a scant excuse for its repeated failure to seemingly rise above the zone of customer service tolerance.

Photo Credit
Photo Credit

In an attempt to ramp up operations and breathe new life into its service provisions, the Indian Railways has off late embarked on a more proactive Public Private Partnership strategic model. Following the directive of the Railway Board, this appears to be a major step in the right direction, provided it becomes sustainable. After outsourcing the cleaning of 50 major railway stations across the country, the Indian Railways has subsequently deployed “Gate Mitras” hired by private agencies at unmanned level crossings. In yet another turn of events, the Indian Railways will now permit selected private players to operate in the computerised Passenger Reservation System (PRS) landscape.

Presently run completely under the aegis of the Indian Railways and operated solely by their employees, this new venture promises to usher a new era in ticketing convenience. These new ticketing centres would be called Yatri Ticket Suvidha Kendras (YTSK) and would be operated by authorised ticketing agents under stipulated guidelines.

1. YTSKs can be operated by only those authorised agents with a minimum of 5 years experience and the requisite infrastructure to run the same.
2. These operators can setup a maximum of 4 YTSKs that will function under the existing model of the PRS run by the Indian Railways.
3. The YTSKs will open for booking of regular tickets at 9am and for Tatkal tickets at 11am; both of which are one hour after the opening of the existing PRS centres. This has been done with a view to reduce chances of malpractice and still safeguard the interests of the current apparatus

On prima facie evidence, the establishment and the operation of a parallel privatised ticket-booking channel ought to help the Indian Railways reach out to newer customers and markets; thereby, expanding their service provision paradigm. This would also lay the foundations for greater PPP initiatives in the future, provided this succeeds. A greater degree of professionalism, efficiency and higher service standards can only benefit all concerned stakeholders. The Indian Railways’ well documented predilection to oppose phased privatisation or pursue half-hearted PPP undertakings has worked to its detriment in the past. However, a shift towards encouraging greater private party participation opens itself to other major undesirable ramifications.

The Indian Railways is presently the largest civilian employer in the world, with over 1.5 million people on its payrolls (Source). Outsourcing projects to private players would mean a sizable number of in-house jobs would be lost. Consequently, these new PPP initiatives have not won any favour from Railways’ employees themselves. The powerful employee unions are of the staunch opinion that this “back-door privatisation” will cause more harm than good; and not merely from the fact that lay-offs would be in order.

The Indian Railways’ present challenge is to pursue a phased PPP alliance that increases its overall operational efficiency and contributes to its future growth prospects. At the same time, it needs to disallow or at least; minimise the chances of nefarious activities such as corruption and gross mismanagement of appropriated resources in this regard. Perhaps this is wishful thinking on behalf of an everyday realist. But this is the only way forward for the public sector monolith. In the absence of any real competition, the Indian Railways enjoys a near sectoral monopoly that has fuelled its hubris and lack of consumer orientation. The road to recovery will not be forged by guaranteeing lifetime jobs to under- performing employees but by knifing down layers of bureaucracy, expanding and improving its service provisions and suitably collaborating with private partners on multiple projects.