The Railway Minister reported the highest ever cash profit of more than Rs 25,000 crore earned by Indian Railways (IR), in the Rail Budget presented on February 26, 2008. The cash profit is nearly 30% more than the previous year and has enabled IR to pay Rs 4200 crore as dividend to the Indian Government.

The IR has planned to invest nearly Rs 2,50,000 crore in the next five years to enhance and improve its infrastructure. Out of this, nearly Rs 100,000 crore of investment, 40% of total, will be through Public Private Partnership (PPP). In the investment under PPP, the Indian bourgeoisie will be the major partner and will therefore have the major share of profit. PPP is nothing but a way to privatize the IR step by step.

The IR has been pursuing back-door privatization for more than a decade. Catering services were the first one to be privatized. Railway stations’ cleaning and maintenance is being handed over to private contractors in lieu of advertising rights. Railway land is being handed over for private development. Ticket checking is being privatized. Upgradation and modernization of railway stations at Delhi and Mumbai is proposed to be handed over to private developers. Large companies have already entered the field of container movement through rail. The IR is encouraging big companies to purchase their own wagons for the movement of goods. The IR is now also proposing to invite foreign multi-nationals to set up factories for large-size locomotives.

People of the country are told that the public sector needs to be privatized because the government does not have resources. Here is a government undertaking making the highest ever profits, generating cash profit of nearly Rs 25,000 crore and has the prospect of earning even higher profit in the coming years. Where is the need and justification to privatize it?

Indian Railways has been built entirely with public money. Now the Indian bourgeoisie believes the time is ripe to change the ownership and control of Indian Railways from public to private domain so that the profits can be enjoyed by a few big capitalists. Since an outright privatization of IR will never be accepted by the Indian people as well as by the IR employees, a gradual privatization is being attempted through the PPP route.

The IR is yet another example of how the Indian bourgeoisie ensured that the state invested public money in a highly capital intensive infrastructure to serve its needs to transport goods and men so that it could invest its capital in more profitable areas. Now that the Indian bourgeoisie has amassed enormous wealth, it wants to move into capital intensive profitable sectors, built with public money; hence the move to privatize IR.

Privatization of IR through any route must be opposed. The working class must insist that IR invests in infrastructure that will serve transport needs better and provide modern amenities and facilities, as well as enable efficient movement of essential goods and services. People should have no illusion now about the UPA government which pursues pro-capitalist policies ruthlessly, while putting on the mask of a “human face”.