Lok Sabha Question No. 6132 (UNSTARRED), answered on 2018-04-04
Subject: Privatisation/Outsourcing of Railway Works
Ministry: RAILWAYS
Asked by: SHRIKANT EKNATH SHINDE, Shrirang Appa Barne, VINAYAK BHAURAO RAUT, ANANDRAO  ADSUL, DHARMENDRA YADAV, PRITAM GOPINATH MUNDE

## GOVERNMENT OF INDIA MINISTRY OF RAILWAYS

## LOK SABHA UNSTARRED QUESTION NO. 6132 TO BE ANSWERED ON 04.04.2018

## PRIVATISATION/OUTSOURCING OF RAILWAY WORKS

6132. DR. SHRIKANT EKNATH SHINDE:

SHRI SHRIRANG APPA BARNE:

SHRI VINAYAK BHAURAO RAUT:

SHRI ANANDRAO ADSUL:

SHRI DHARMENDRA YADAV:

DR. PRITAM GOPINATH MUNDE:

## Will the Minister of RAILWAYS be pleased to state:

- (a) whether  the  Government  had  approved  100%  Foreign  Direct Investment  (FDI)  in  the  railways  and  agreements  with  Alstom (France) and General Electric (USA) for manufacturing electric and diesel  locomotives  respectively  have  been  entered  into  including contracts for maintenance by the foreign agencies for a period of 15 years ;
- (b)
- if so, the details thereof and the time when it was approved;
- (c) whether  security  aspects  were  considered  before  allowing foreign  entities  for  large-scale  outsourcing  of  railway  works  and  if so, the details thereof;
- (d) whether  it  is  a  fact  that  the  privatisation  or  outsourcing  of regular  works  through  contracts  violates  the  provisions  of  the Contract Labour (Regulation and Abolition) Act, 1970 and if so, the reaction of the Government thereto;

- (e)    whether the Railways has received concerns from the peoples representatives and various railway employees unions for allowing 100% FDI, privatisation and outsourcing of railway works; and

(f)  if  so,  the  response  of  the  Government  thereto  and  the  action

- taken thereon?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI RAJEN GOHAIN)

(a)& (b) Yes, Madam.  Agreements have been signed with ALSTOM (France) and General Electric (USA) for manufacturing and maintenance  of  electric  and  diesel  locomotives.    As  per  contract 800  electric  locomotives  and  1000  diesel  locomotives  are  to  be manufactured and supplied from the factory set up by the companies at  Madhepura  (Bihar)  and  Marhowra  (Bihar)  respectively  over  a period of 11 years.  Two Joint Venture (JV) companies have been set up for this purpose.  Ministry of Railways is a 26% stack holders in these  two  JV  companies.  The  companies  would  also  undertake maintenance/supervision of the first 500 locomotives by setting up maintenance facilities at Saharanpur, Nagpur, Roza and Ghandhidham.

The  project  envisages  transfer  of  technology  for  maintenance  to Indian Railway staff in terms of providing benchmarking of maintenance  facilities  as  well  as  global  practices  in  undertaking maintenance of these locomotives. The maintenance facilities would revert back to the Indian Railways on completion of the maintenance obligations following which the maintenance would be carried out by Indian Railways staff.

These projects were approved by the Cabinet in 2010 and subsequently  the  bidding  documents  were  also  approved  by  the Cabinet in 2014.

- (c) The companies were selected through an international competitive  bidding  process.  Compliance  to  the  requirement  of national  security  and  public  interest  is  a  part  of  the  eligibility criteria.
- (d) No,  Madam.  Railways  resort  to  privatization  or  outsourcing only  in  respect  of  non-core  and  non-regular  activities  in  different departments.

(e)&(f) Yes, Madam. Railway Staff Unions/Federations have expressed  some  concerns  about  Foreign  Direct Investment  in Railways, privatisation and out sourcing of railway works.

The Department of Industrial Policy and Promotion (DIPP) of Government  of  India  had  issued  the  consolidated  Foreign  Direct Investment (FDI) Policy which allows FDI in Railway Infrastructure sector on automatic route in the areas namely :-

- (i)     Suburban corridor projects through PPP;
- (ii)    High speed train project;
- (iii)    Dedicated freight lines;
- (iv) Rolling stock  including  train  sets  and  locomotive/coaches manufacturing and maintenance facilities;
- (v)    Railway Electrification;
- (vi)   Signalling systems;
- (vii) Passenger terminals;
- (viii)Infrastructure in industrial part pertaining to railway line/sidings including  electrified  railway  lines  and  connectivities  to  main

railway line; and

- (ix)  Mass Rapid Transport Systems.

Further,  the  Indian  Railways  undertakes  outsourcing  of  certain facilities  like  cleaning,  pay and use toilets, retiring rooms, parking etc. on need based manner to improve efficiency.

Interest  of  the  railway  staff  is  taken  into  consideration  while outsourcing.

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