Railways set to hive off production units in corporatisation drive

The Indian Railways is coming up with a plan to hive off its production units and associated workshops into a new government-owned entity—Indian Railway Rolling Stock Company. The move is part of an overall strategy to corporatise the functioning of the organisation.  

The Ministry of Railways is expected to hold consultations with the unions soon on this and a Cabinet note is likely to be floated within the first 100 days of the government .

The new entity is proposed to drive the technology partnership and modernisation initiatives of the seven production units under the Indian Railways—Chittaranjan Locomotive Works (CLW), Integral Coach Factory (ICF), Diesel Locomotive Works (DLW), Diesel Modernising Works DMW-Patiala), Wheel & Axle Plant (Bangalore), Rail Coach Factory (RCF-Kapurthala) and Modern Coach Factory (MCF) in Rae Bareli. 

The plan suggests that each production unit with a chief executive officer will function as an individual profit centre, reporting to the board and chairman and managing director of the new company. Once the Cabinet clears the proposal, MCF Rae Bareli may become the first unit to come under the new entity.

Subsequently, other units may also come under IR Rolling Stock Company in a phased manner.

According to a source close to the development, Railway Board chairman V K Yadav has already written to various production units citing this among the priorities during the first 100 days. The measure  may help the existing production units get wider market access to state-of-the-art technology and achieve superior operational efficiency. It could also promote exports.

As part of the 100-day strategy, the board is also planning re-development of at least 50 stations out of a total of 500 at an investment of Rs 1.1 trillion. Getting approval for elimination of 2,568 level crossings on the Golden Quadrilateral and diagonals is also on the government priority list. An investment of about Rs 50,000 crore is expected for this in the next four years.

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