New Delhi, India (Urban Transport News): The massive restructuring of Indian Railways as proposed by Principal Economic Advisor to Govt of India Sanjeev Sanyal, the Ministry of Railway has given 'in principal approval' to close the Indian Railway Station Development Corporation (IRSDC) which is engaged in big ticket projects for redevelopment of existing railway stations of major cities.
The Ministry has today issued direction to IRSDC to initiate closure formalities and hand over all its onging projects to respective zonal railways, said sources. IRSDC has been directed to handover the redevelopment plans and documents to the zones for implementing the projects going forward.
The Principal Economic Advisor in his proposal has mentioned that the IRSDC and Rail Land Development Authority (RLDA) are involved in station redevelopment, management and other related works and thus had significant overlap. However, RfPs for the all major station redevelopment projects were floated by the IRSDC and this PSU was also actively involved in the implementation of several major stations like Chhatrapati Shivaji Terminus Mumbai, New Delhi Railway Station, Nagpur, Jaipur, Amritsar, Gwalior, Sabarmati Stations among others.
However, while selecting one organisation among two similar organisations i.e. IRSDC and RLDA, the Ministry has choosen RLDA as best performing PSU and hence decided to close the IRSDC. Sanyal in his report, cited the creation of synergies and the removal of duplication that would result from the exercise.
Experts says that Ministry’s decision to closure of IRSDC and hand over station redevelopment works to zonal railways is likely to substantially delay or completely derail such big-ticket projects.
Apart from this, Sanyal has recommended the merger of Ircon International Limited (IRCON) with Rail Vikas Nigam Limited (RVNL); Braithwaite and Company with Rail India Technical and Economic Services Limited (RITES); Centre for Railway Information and Systems (CRIS) and RailTel with Indian Railway Catering and Tourism Corporation (IRCTC).
Principal Economic Advisor's report proposed that RVNL be merged with IRCON International because both are engaged in the construction of railway infrastructure. IRCON International specialises in the construction of railways, highways and mass rapid transit systems while RVNL implements projects related to the creation and augmentation of the capacity of rail infrastructure on a fast-track basis.
Commenting on the merger plan as recommended by Principal Economic Advisor, Subodh Jain, Former Member (Engineering), Railway Board said:
The proposal of mergers in the railway sector is good from the perspective of raising funds. The trend shows that the Government is now looking to create similar domain-based monopolies to boost valuation. Market loves monopolies.
“After the struggle to monetise Air India, the learning is to monetise a PSU before it becomes defunct. This government has probably realised that it makes more sense to monetise public sector units while they are still profit-making. They can be navratnas or miniratnas,” he added.
In his report, Sanyal also recommended for the winding up of other public sector enterprises like the Central Organisation for Railway Electrification (CORE), the Central Organisation For Modernisation of Workshops (COFMOW) and the Indian Railways Organisation for Alternate Fuels (IROAF).
The cabinet secretariat directed to Railway Board CEO and Chairman Suneet Sharma to send an action taken report on it in the first week of every month.