Widespread mergers, closures of Railway PSUs likely; RVNL, CRIS, CORE, RailTel on list

Principal Economic Adviser Sanjeev Sanyal has proposed a widespread rationalisation plan for Railway organisations and PSUs which could see several mergers and closures
Indian Railways
Indian Railways
  • RVNL proposed to be merged with IRCON
  • Braithwaite & Co Ltd to be merged with RITES
  • RailTel to be merged with IRCTC, CRIS to be wound up
  • A new PSU to be formed to head Railways' 8 production units

New Delhi: Principal Economic Adviser Sanjeev Sanyal has proposed a widespread rationalisation plan for government organisations and PSUs under the aegis of the Ministry of Railways which could see several mergers and closures, an official document accessed by PSU Watch shows. On the list are PSUs like Rail Vikas Nigam Ltd (RVNL), Braithwaite & Co Limited (BCL), Centre for Railway Information Systems (CRIS), RailTel, and organisations like Railways' Production Units, Central Organisation for Railway Electrification (CORE) and Central Organisation For Modernisation Of Workshops (COFMOW), among others.

RVNL proposed to be merged with IRCON

The rationalisation plan has proposed the merger of Rail Vikas Nigam Ltd (RVNL) with Indian Railway Construction Ltd (IRCON). "Railway and highway construction, including EHP sub-station engineering and constructions, and also special structures, MRTS, etc are the core competence areas of IRCON. On the other hand, RVNL implements projects related to creation and augmentation of capacity of rail infrastructure on fast track basis. Both IRCON and RVNL have similar business functions — construction of railway infrastructure. While IRCON bids for private contracts and has significant international presence, RVNL functions as a sub-contractor of IR by getting works on a nomination basis from Railways with no borrowing power of its own. Therefore, we recommend that RVNL be merged into lRCON," says the document.

RailTel to be merged with IRCTC, CRIS to be wound up

To reduce redundancy of operations within the system, Sanyal has proposed the merger of Braithwaite & Co Ltd (BCL) with RITES and RailTel with Indian Railway Catering and Tourism Corporation (IRCTC). 

"RITES is a consultancy organisation which also exports rolling stock and inspects materials procured by the Railways. BCL also operates in the sector of rolling stock — carrying out wagon manufacturing and outsourcing to third parties. Braithwaite turned sick in 1992 but things have changed for better over the last two years. Roth RITES and Braithwaite preform similar nature of work, it is therefore recommended that Braithwaite be taken over by RITES," says the proposal.

Referring to RailTel, IRCTC and CRIS, Sanyal has said in the proposal, "There exists significant overlaps in the functions of these three organisations, however, presently, all the three organisations work in silos causing technology adoption in railways to suffer. It is therefore logical to integrate the three organisation. This would allow Indian Railways to exploit the natural synergy between them and provide better passenger amenities. We recommend CRIS be wound up, handing over all its work to IRCTC, and RailTel be merged with IRCTC."

A new PSU to be formed to head Railways' 8 production units

Indian Railways has eight Production Units. Three coach factories — Integral Coach Factory (ICF) Chennai, Rail Coach Factory (RCF) Kapurthala, and Modern Coach Factory (MCF) Rae-Bareli. Three locomotive manufacturing units — Chittaranjan Locomotive Works (CLW), Chittaranjan, Diesel Locomotive Works (DLW), Varanasi and Diesel Loco Modernisation Works (DMW), Patiala, and two Rail wheel units in Yelahanka (Bangalore) and Bela (Bihar).

"We propose that one CPSE be established for Rolling Stock and manufacturing of Locomotives (bringing all the eight production units under its fold). This can be done by transferring the assets and deploying the employees of the existing Production Units to the proposed CPSE in a phased manner," the document says.

CORE, COFMOW proposed to be wound up

Central Organisation for Railway Electrification (CORE) was established with a prime objective of electrification of railway tracks. Once the annual estimate of electrification of tracks is provided by respective Zones, CORE tenders out the electrification projects through approved Engineering, Procurement and Construction (EPC) contracts. "The monitoring of physical progress of electrification is being done by the respective Zones. This alleviates the need for a separate organisation such as CORE. Thus, we recommend that CORE should be wound up. All future tendering may be handled by Zonal Railways through approved EPC contracts," says the document.
In addition, it has also recommended winding up Central Organisation for Modernisation Of Workshops (COFMOW), saying it has lost its relevance.

The rationalisation plan has further proposed that either Indian Railway Stations Development Corporation (IRSDC) Limited or Rail Land Development Authority (RLDA) should be identified as the sole functioning entity and given full responsibility as IRSDC does similar work on lines of RLDA. Railway Directorates with similar functions are also likely to be merged, according to the plan.

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