Moneycontrol PRO
Open App
you are here: HomeNewsBusiness

Budget 2022: Govt likely to set roadmap for railway PSUs merger

Rail Vikas Nigam is to merge with Indian Railway Construction, RailTel with Indian Railway Catering and Tourism and Braithwaite with Rail India Technical and Economic Services.

December 31, 2021 / 02:07 PM IST
The Railway Board has suggested a timeline for the merger of the six PSUs, the officials who did not wish to be identified said.(Image: ShutterStock)

The Railway Board has suggested a timeline for the merger of the six PSUs, the officials who did not wish to be identified said.(Image: ShutterStock)

The Centre is likely to announce a roadmap for the merger of six public sector undertakings (PSUs) under the Ministry of Railways in Budget 2022-23, starting the process for a radical restructuring of these organisations.

The mergers were recommended by principal economic adviser Sanjeev Sanyal in August 2021 in a report on the rationalisation of government bodies under the railway ministry.

Top government officials have told Moneycontrol that Finance Minister Nirmala Sitharaman is likely to announce the path towards the merger of Rail Vikas Nigam Ltd (RVNL) with Indian Railway Construction Ltd (IRCON), RailTel Corporation with Indian Railway Catering and Tourism Corporation (IRCTC) and Braithwaite & Co Ltd with Rail India Technical and Economic Services (RITES) when she presents Budget 2022-23 on February 1.

The Railway Board has suggested a timeline for the merger of the six PSUs, the officials who did not wish to be identified said.

“Two out of the three railway PSU mergers are likely to be completed next year but adherence to timelines will depend on regulatory approvals,” one official said.

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

The mergers of RVNL with IRCON and RailTel with IRCTC are likely to be completed in 2022-23. The railway ministry expects the mergers to boost valuations of the PSUs, which would be useful for raising funds on better terms.

RVNL is tasked with implementing projects for the creation and augmentation of rail infrastructure; IRCON is a specialised infrastructure construction organisation.

RITES is a consultancy that exports rolling stock and Braithwaite manufactures rolling stock.

The proposed mergers have the potential to create monopolies that will command greater valuations when offered for sale in parts or whole.

The process for the merger of the Railway PSUs was initiated in September with the Finance Ministry asking Indian Railways to come up with a plan to merge seven public sector companies proposed by the principal economic adviser.

It also asked the Railway Board to chalk out a plan to downsize operations within Indian Railways to help organisations focus on their core competencies of  running and maintaining railway services.

Sanyal highlighted the overlaps of operations between RailTel, IRCTC and Centre for Railway Information Systems (CRIS) in a report titled Rationalisation of Government Bodies, Proposal for Ministry of Railway.

RailTel provides telecom infrastructure through optic fibre networks along railway tracks, IRCTC is the main internet ticketing arm of Indian Railways and CRIS is an autonomous society to develop software for passenger ticketing, freight invoicing and passenger train operations.

The report recommended winding up CRIS after handing over all the work it does to IRCTC.  The report noted that IRCTC’s passenger reservation system is currently operated by CRIS, for which the company and Indian Railways pay the society.
Yaruqhullah Khan
Sections
ISO 27001 - BSI Assurance Mark