Indian Railways' LHB coaches, some of which are made at the Modern Coach Factory in Rae Bareli | Photo: Commons
Indian Railways' LHB coaches, some of which are made at the Modern Coach Factory in Rae Bareli | Photo: Commons
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New Delhi: The Indian Railways is all set to come up with a cabinet proposal to corporatise the Modern Coach Factory (MCF) in Rae Bareli, as part of its bid to improve efficiency, ThePrint has learnt.

Sources in the Ministry of Railways told ThePrint that officials of the NITI Aayog, the railways and the finance ministry are expected to meet this week to finalise the contours of the plan.

The proposal would make the MCF, which produces about 2,000 Linke Hofmann Busch-designed (LHB) coaches every year, an autonomous unit with a corporate structure.

ThePrint sent queries through messages about the plan to railways spokesperson D.J. Narain, but there was no response till the time of publication.

Also read: Modi govt move to cut 24 Railway Board posts ‘put on hold after officers raise questions’ 

What the move will entail

As part of a 100-day action plan announced in June 2019, the railways proposed the corporatisation of all the production units of rolling stock, and merging all eight of its production units into one ‘Indian Railways Rolling Stock Corporation’.

Subsequently, it decided to corporatise the MCF first, and then carry out the exercise for other units in a phased manner, announcing the move later in June 2019 itself.

Explaining how corporatisation would affect the functioning of the MCF, a railways official said: “The units will become PSUs part of the Indian Railways Rolling Stock Corporation, and function independent of the ministry. They will take commercial, financial and manpower decisions on their own under an independent board, and autonomy will give them flexibility and freedom to function more efficiently.”

The units would function like the IRCTC, which is an autonomous company under the railways ministry, the official added.

Market-driven units

The railways had assigned its subsidiary RITES the task of studying corporatisation of the rolling stock units, in an attempt to make all the production companies “market-driven” and “export-oriented”.

“It has long been felt that the production units are suffering from technology stagnation, and corporatising them could ensure they become more competitive and market-driven,” a second railways ministry official said.

RITES was supposed to recommend what would happen to the existing employees of the companies when they are corporatised.

In the case of MCF, which has about 2,300 employees, RITES suggested measures like voluntary retirement scheme (VRS) to rationalise the workforce, the official added.

However, the announcement had sparked protests, including from Congress interim chief and Rae Bareli MP Sonia Gandhi.

“Those who don’t understand the real meaning of corporatisation… It is actually the first step towards privatisation. They are selling the country’s assets to a handful of private players at a throwaway price. This will leave thousands unemployed,” Gandhi had said.

Also read: Remove pantry cars from trains to cut costs, top railway employees’ body tells Piyush Goyal


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