Railway workers union trashes Bibek Debroy report on restructuring

Raises questions over most of the recommendations made by NITI Aayog in a scathing 32-page letter

New Delhi: The Bibek Debroy committee’s report on ways to restructure and modernise Indian Railways has come in for severe criticism from the workers union – National Federation of Indian Railwaymen (NFIR)  – that represents majority of the 13 lakh railway employees.

In a scathing 32-page letter to Debroy, the federation has trashed most of the recommendations made by the NITI Aayog member including introduction of Foreign Direct Investment (FDI) and private partnership in operations, formation of a regulatory authority and revamping the railway board through its bifurcation.

NFIR has alleged Debroy did not examine the actions of successive governments in starving the railways of investments and deliberately withholding passenger fare hikes through a decade.

“For instance, when fares were raised and withdrawn during one railway budget, the loss was around Rs 7,000 crore. The organisation is not responsible for the investment starved situation,” the union said.

According to NFIR, it is not desirable to experiment with FDI and private players in infrastructure without building massive railway infrastructure first. It argues political compulsions and commitments are responsible for slowing down of the railway network and train speeds and not railway workforce.

“In its euphoria to provide a new roadmap for the Railways, with private players pitching in, perhaps the committee has failed to go deep into these initiatives on the European railways, whose tariffs soared, and most of the rail systems such as the one in Britain still provide huge subsidies to infrastructure companies, which remain state-owned,” the letter said.

The workers union also invoked British author and railway historian Christian Wolmar to highlight the failed privatisation experiment in British railways which has been recommended by Debroy. Wolmar had stated that “privatisation and fragmentation had created a dysfunctional (British) railways as it was undertaken for ideological and financial reasons with little consideration of passengers.”

Interestingly, the union has also claimed that either the inputs for the Debroy panel were hurriedly taken from the railway board or sufficient time was not spent in understanding what was supplied.

“For instance, a table at Page 66 of Debroy report wrongly shows Parbhani as another division under South Central Railway whereas it has only 6 divisions-Secunderabad, Hyderabad, Vijayawada, Guntur, Guntakal and Nanded,” NFIR contended.

Trashing Debroy’s argument in favour of increasing competition by introduction of new players, NFIR argued his report has ignored how, thanks to massive gauge conversion exercise since 1990s, Indian Railways has managed to successfully increase freight volumes without substantial increase in route Kilometer.

“There are certain elements of discord and inconsistency within the report. For instance, it is stated the Committee does not recommend privatisation of IR except in very specific non-core segments and goes on to state that privatisation is to be implemented as liberalisation while deliberating on rationalising production of rolling stock, which is essentially a core segment of IR. This is basically the irony of the entire report,” NFIR said in its letter.

The union has also cautioned against the negative impact of introducing PPP at a time when projects worth Rs 1.86 lakh crore to be implemented under the mode are virtually stalled.

“Restructuring cannot be an exercise which can be subjected to such a disastrously confused perspective of connecting the current state of matters with what can be actually and effectively desired for the future,” the letter stated.

Criticising the Debroy panel for failing to understand the real reason for a regulatory body, NFIR has argued “the necessity is perhaps of not a ‘Regulatory’ mechanism but of an automatically processed routing-and-rating system in-built within the IR. Similarly, if Pension liability is ‘unbundled’ from IR’s liability, staff costs would sound almost menial.”

The union has said Debroy panel missed the crux of the issue – unlike many other railways in the world, Indian Railways has not had a connection between the volume of freight carried on a line and the freight rate fixed for that line.

The letter also states that panel has wrongly concluded that Indian Railways is to be freed from certain activities in order to concentrate on core business. It asks the committee to appreciate that self-sufficiency is essential in production and maintenance of locomotives and coaches and entrusting railways’ activities to outside agencies would dilute quality of service.

Railway workers union says

  • Debroy did not examine the actions of successive governments in starving the railways of investments and blamed workforce for problems
  • It is not desirable to experiment with FDI and private players in infrastructure without building massive railway infrastructure first
  • In euphoria for roadmap, Debroy ignored the shortcomings of European railways including the failed privatization model of British Railways
  • A table in Debroy report wrongly considers Parbhani as a Division under South-Central Railway while it is actually not, indicating the inputs were taken by the panel hurriedly from the railway board
  • Restructuring cannot be an exercise subjected to such a “disastrously confused perspective” of connecting the current state of affairs with what is desired for the future