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Privatisation is not the question

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The discussion in Telangana should focus on ways of revitalising the State Road Transport Corporation

On November 2, a day after the Telangana State Road Transport Corporation (RTC) strike entered its 28th day, neither the Telangana government nor the Joint Action Committee representing over 48,000 employees showed any sign of changing their positions. Several news commentaries noted this to be the longest-ever strike in the history of the corporation, which traces its origins to the Nizam State Rail and Road Transport Department. The previous longest strike, which lasted 27 days, took place in 2011 as part of a general strike in support of the separation of Telangana State from Andhra Pradesh. The reference to this fact is not without meaning — it was the present Chief Minister, K. Chandrasekhar Rao, who gave the call for the 2011 general strike which proved to be a watershed in the long-drawn struggle for statehood.

Privatisation plans

The long-term consequences of this fallout between the employee unions and the State government will certainly be serious, both politically and economically. Four of the striking employees of the current strike have committed suicide. On November 2, in the press briefing after the State Cabinet meeting, Mr. Rao reiterated his stance: get back to work or face dismissals. He sought to establish that the strike was illegal and politically motivated. He reminded the Bharatiya Janata Party, one of the opposition parties rallying behind the striking employees, that his government was acting within the provisions of the Motor Vehicles (Amendment) Act 2019.

The key demand of the RTC employees is merger of the corporation with the government. Simply put, it is a demand for pay parity with government employees. The Telangana government summarily rejected this demand. On the contrary, it declared privatisation of routes on which 5,100 buses are currently plying. These presumably include 2,100 buses presently leased in and operated by the RTC and another 3,000 which are either already phased out or are about to be phased out.

If there is a strategic plan behind the Cabinet’s decision to privatise routes, it is not immediately apparent. The broader plan previously laid out by the government suggested a trifurcation of the RTC where approximately half the present fleet of 10,400 buses in the State would be run by the RTC exclusively, another 30% would be taken on hire and operated by private owners, and the remaining 20% would be entirely privately operated. This plan suggests an attempt to counter perceived inefficiencies of the RTC. However, the RTC being a publicly owned corporation with permanent employees is obligated to give wages to the staff in accordance with their experience, and is obligated to run bus services even if the operational efficiency is not ideal. Private operators are not obligated to do either. Even if one were to overlook this negative outcome for the workers and the general public, the fact remains that without a negotiated plan to downsize staff, this decision will only transfer the staff from the off-loaded routes back into the corporation, pushing up the already high bus-to-staff ratio and aggravating operational inefficiencies. It is this move which the unions are reading as a sign of a conspiracy to kill the RTC completely.

Political questions apart, road transport in the region has undergone a sea change in the last 20 years. It has seen the RTC go from one of the best transit organisations in the country to being among the weakest. During this period, the government reduced vehicle tax and increased salaries of the employees. However, these have had no significant impact on the plummeting incomes of the corporation, as fares have simply not been increased even as fuel costs have gone up. Nor did it improve employee morale, as new capital infusion has not taken place leaving the corporation to not only eat into the reserves of the credit society funds and deny general employee benefits, but borrow at market rates from banks to meet the operational costs. During this period, the RTC saw a number of labour practices which forced the employees to work longer hours. At the same time, there was a gradual decline in the number of permanent staff, particularly in the maintenance wing, with the retiring workforce not being replaced with new employees. During this period, both the region and the city of Hyderabad have seen a phenomenal growth in private and for hire vehicles. Paratransit (shared autorickshaws) have become the default mode of transit across the entire region; aggregator platforms such as Ola and Uber and other cab and bike startups have been eating into the operational spaces of the buses. More recently, the Metro Rail in Hyderabad has severely constrained the manoeuvrability of the RTC.

On the whole, the Cabinet decisions of November 2 are perceived as threatening the unions rather than as a business plan to lift up a sinking bottom-heavy corporation which has served an important role in the region’s economic growth. In the short run this will mean suffering for the 48,000 families; in the medium term it will mean further aggravation of the RTC’s problems; and in the long run this could have political fallouts that are imponderable at present.

The way out of this is to acknowledge that public transportation is a key capacity of the government. It has a favourable but immeasurable impact on the general economy. To privatise or not to privatise is not the question; rather, the question is how to retain the government’s core capacities and roles in the regional and urban economy. No government can afford to abdicate that role. No government can work without taking unions into confidence; without giving corporation managements some degree of professional autonomy; and without owning up its own financial obligations. The rest is a matter of negotiation and careful calibration.

Not a profit-making entity

The long and the short of it is that the employees understandably see a studied indifference to public transportation and a refusal by the government to own its own assets; if not an outright conspiracy to privatise the assets of the RTC. The RTC is not a profit-making entity, they rightly remind us — it is a tool for catalysing economic growth, democratising opportunities for people in seeking health, education, employment. Presence in public transit is not something that any government has ever given up. This conversation therefore cannot be confined to whether or not to privatise. It should be about how to revitalise the RTC — even if it means some mix of public and private transportation. For that to take place, the government must publish a white paper and take immediate steps to arrest the haemorrhaging of the RTC. The stop-gap solution of running a skeletal service at premium, as it has done for the last month, is just too expensive for everyone.

Anant Maringanti is Director of Hyderabad Urban Lab Foundation

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Printable version | Dec 11, 2019 4:36:04 PM | https://www.thehindu.com/opinion/op-ed/privatisation-is-not-the-question/article29872102.ece

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