Ppp of Indian Railways

Page No. 7
luxury tourist trains, cleaning of coaches at major stations and depots, parcel, and more
significantly container trains.
16. Going by the international experience and the phasing in other sectors (airlines beingprivatized before airports PPPs, road based services being traditionally in the privatedomain before road BOT PPPs), one would believe that services would first get the PPPframework before the infrastructure creation getting it. The explicit argument used bythe IR is that, given the complexity of rail operations and potential for better resourceutilization, the comparative advantage in managing services would be with IR.
17. This argument is limited since services have many levels. At the simplest, we cancategorise it into three: maintenance, operations and customer services [Raghuram,2001]. Operations are closest to the infrastructure like train haulage, train control etc.The benefits of dealing with complexity and better resource utilization would be limitedto this area, if at all. The customer services which deal with value added customerinterfacing and maintenance like input services are workable in the PPP space. In fact,the customer responsiveness and market savviness that the PPPs bring in for customerservices can increase revenues far beyond what a large system like IR can do. Similarly, acompetitive procurement can bring down the costs of maintenance, and improve quality.
18. Our diagnosis of the situation is that the IR is comfortable with some of theinfrastructure creation moving into PPP space since they have been used to it with thetraditional outsourcing by using contractors for construction, and public and privatemanufacturers for wagon procurement. On the other hand, there is a tremendous senseof discomfort of customer interfacing services moving into PPP space, since theyinvolve revenue generation and control on end user pricing. Regarding maintenanceservices moving into PPP space, the discomfort is due to the need for... [continues]

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