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Congress does u-turn on public-private partnerships in Indian railways since the UPA era: Here is what happened then and now

The PPP Model has been used extensively in the past to fuel the growth engine of the Indian economy and usher in development. Not so long ago, the Congress itself was predisposed towards such partnerships as is evident from the conduct of the UPA Government.

The Congress party, of late, has been protesting against what it calls the ‘privatisation’ of Indian Railways. Recently, the Indian Youth Congress held a symbolic ‘shirtless’ protest against the same.

“Since the present BJP led NDA government came to power in 2014, many government PSUs and otherwise government-held assets have moved towards privatization. The anti-poor government at the Centre has also consistently moved towards privatization of Indian Railways, which will gradually lead to the railway becoming unaffordable for the common man,” the IYC said in a press release.

Ostensibly, the protests are regarding the decision of the Indian Railways to permit private entities to operate 109 trains on its rail network. Senior Congress leader and leader of the party in the Lok Sabha Adhir Ranjan Choudhary claimed that it was adding “salt to the injury of common people”. “It is easy to privatize the 109 pairs of trains but for whose interest?” he asked.

For its part, the Railways said, “The objective of this initiative is to introduce modern technology rolling stock with reduced maintenance, reduced transit time, boost job creation, provide enhanced safety, provide world-class travel experience to passengers.” The 109 origin-destination routes have been formed into 12 clusters across the Indian Railway network. Each train shall have a minimum of 16 coaches, it said.

It is important to remember here that the initiative of the Indian Railways in question is not exactly ‘privatisation’ so to speak. The correct term to use here is Public Private Partnership (PPP). The PPP Model has been used extensively in the past to fuel the growth engine of the Indian economy and usher in development. Not so long ago, the Congress itself was predisposed towards such partnerships as is evident from the conduct of the UPA Government.

It is only when they lost power that they suddenly appear to have discovered the perils of it. Like everything else, even the current issue is being embroiled in petty politics so that the Congress party could gain at least some political mileage from it. Distressed by its current political irrelevance, it is throwing everything in its arsenal at the BJP in the deluded hope that something sticks.

Favourable comments by senior Congress leaders during UPA regime

In his inaugural address at the Conference on PPP in National Highways in September, 2011, then Prime Minister Manmohan Sinmgh said, “I have often said Public Private Partnership is private profit in service of public at large”. P Chidambaram said in his budget speech in 2004, “I believe that the key to growth is investment – public and private, domestic and foreign. It is therefore my intention to considerably enhance investment in all sectors of the economy.”

In his 2005 Budget Speech, P Chidambaram said, “In agriculture, we shall enhance public and private investment in the infrastructure required to support expansion, diversification and value addition. In the industrial sector, both the public sector and the private sector will be allowed the space to grow and compete with each other. Government will play the leading role in providing and facilitating investment in public goods such as roads, railways, power, seaports and airports. In the services sector, Government will recognize the leading role played by the private sector, and provide a supportive policy environment and stable tax policies.”

In his 2005 Budget Speech as the Railways Minister of the country, Lalu Prasad Yadav said, “To ensure the commercial utilisation of surplus railway land and air space I had, during the last Parliament session, presented a Railway (Amendment) Bill, 2004 in the Rajya Sabha, for setting up of RLDA. This authority will, through public-private participation, develop surplus land adjoining railway stations and goods sheds for constructing warehouses and logistics parks. It would also generate additional resources for the development of railways.”

Lalu Prasad Yadav said in his 2006 Railway Budget Speech, Lalu Prasad Yadav said, “We will not allow resource constraints to hamper expansion of the rail network. We will encourage public-private partnership schemes for effecting significant improvements in rail services. This is the need of the hour.”

It is pertinent to mention here that Lalu Prasad Yadav was the Railway Minister during the UPA regime. Thus, quite clearly, the Congress party itself was not averse towards public-private partnerships when it was in power. It is only now that the NDA government is treading the same path that it is suddenly finding fault with it.

Opinion on Disinvestment and Privatisation of Congress party

Close aide of former Congress president Sam Pitroda said in an article in May 2018, Rajiv Gandhi “emphasised privatisation, liberalisation, free market economy, democratisation, deregulation, technology, entrepreneurship, innovations, etc, in the mid-eighties, with a commitment to expedite the process of development in India.”

Former Commerce Minister Kamal Nath had told ET in 2009 that “disinvestment of government equity while maintaining management control will only improve the efficiency of some of these public sector undertakings”.

Allegations of Scam involving PPPs during UPA regime

Lalu Prasad Yadav, his son Tejasvi Yadav and his wife, Rabrfi Devi, were accused of corruption during his tenure as Union Minister in 2006. He was accused of facilitating the lease of two hotels to a private company Sujata Hotels in return for a 2-acre plot in Patna, Bihar during his tenure as Railway Minister from 2004-09.

The Central Bureau of Investigation conducted raids at 12 locations associated with the RJD Supremo and others accused in the IRCTC hotel Lenders Case in July, 2017.

In 2018, movable assets worth Rs. 17.55 crores be;onging to R.K. Associates and Hoteliers Pvt. Ltd., Satyam caterers Pvt. Ltd. And others were attached by the Enforcement Directorate in a scam related to Rail Neer. The CBI discovered in its investigation that private caterers were mandated to supply Rail Neer water bottles to Rajdhani and Shatabdi trains.

Instead, other packaged drinking water brands were supplied in collusion with officers in the railways department causing a loss of Rs. 19.55 crores to the government exchequer between January 2013 and December 2014. Furthermore, it was revealed that the private entities had laundered Rs. 17.55 crores to their bank accounts.

Success stories of public-private partnerships in Indian Railways

Numerous contracts have been signed under the ‘Make in India’ initiative that is expected to increase average speed of goods trains in freight corridor. 19 electric locomotives and 2010 diesel locmotives have been delivered to Indian Railways under a PPP programme. The first such locomotive has already been put under operation by the Indian Railways.

One of the greatest success stories of the PPP Model, however, is the corporate trains being run by IRCTC in three routes currently. The Ahmedabad-Mumbai Tejas Express Train, the Delhi-Lucknow Tejas Express train and the Kashmi Mahakal Express train are operated by the IRCTC. Onboard services are provided by the IRCTC in association with private partners and have been well received by the people at large.

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