If IR retains rake maintenance, technical staff (Locopilots, guards) etc., then what exactly do the private entities supposedly bring? When you throw the word privatization, I am not bothered with ancillary services like OBHS, catering etc. which IR benefits if they outsource/leverage PPP as it isn't their primary business model.
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My concern regarding privatization is w.r.t how chunks of routes are balkanized and sold to the highest bidders, and instead of zonal divisions like SR,CR,SCR etc., we will end up with something like Tier I traffic network, Tier 2 traffic...
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network etc. zones segregated based on profitability.
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A business model when privatized add considerable amounts of volatility and in India where justice mechanism is inefficient and lawmakers don't really understand industry, private players crave profitability mainly through 2 means: deregulation and arbitrary price setting, both of which can be disastrous for IR.
You gave a sensible example of TRAI and BSNL. Now, let me ask you, if the 5 odd surviving competitors (Jio, Bharti Airtel etc.) together decided to increase tariffs by 100%, what option do we have? You can be sure BSNL won't seek to compete and match them at least since the government has its eyes on votes. Same as my example for Insurance companies and LIC. But what happens if an entity like BSNL does not exist and is made to shrivel for the sake of these companies?
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And like telephone operators drop certain plans fro their offer and airliners call off certain routes when they don't get their desired profits, how much of that volatility can IR withstand?
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Customer preferences are already well-established, when people opt for railways, they are doing so for the value proposition and the benefit of lower cost. Cleanliness, Punctuality etc. are standards that must be met for all kinds of passengers and that is no excuse nor any sense to suggest privatizing will help these parameters. Private players, unless they are bringing something to the table, like adding serious infra (futuristic Bullet/Metro projects), should not be allowed to set prices/takeover routes etc.