Railway Board orders PSUs to compete in free market

The Railway Board has issued an order requiring public sector undertakings (PSUs), including those under the national transporter, to compete for rail contracts with the private sector in the free market. The order, passed on October 26, 2021, effectively removes the degree of protection enjoyed by PSUs under a policy issued in 2019 that gave them first rights on lucrative rail contracts. Earlier, the railways identified eligible PSUs and awarded contracts following competition within those organisations. The winning PSU would subsequently issue tenders for the project’s contractors. The policy now stands withdrawn. Under the new policy, the zonal railways will float tenders in the market, and the contract will be granted to whoever wins the offer, whether it is a PSU or a private enterprise. This will not only eliminate monopolies among some organisations but also save time and money.