The case “Tejas Express: Indian Railways’ Leap toward Privatization?” discusses in detail the decision of public sector undertaking Indian Railways (IR) to go in for a limited form of privatization by allowing another entity to operate one of its premier trains, the Tejas Express (TE), between New Delhi and Lucknow. While IR remained in charge of the physical infrastructure, the services aspect was given over to its wholly-held subsidiary, The Indian Railway Catering and Tourism Corporation (IRCTC). The case starts out by giving a brief history of IR and touching on the issues that resulted in the public utility incurring mounting losses. It gives a quick insight into the privatization initiatives of the public railway systems of a couple of countries that helps in understanding the consequences of privatizing a public utility. The case then debates whether IR should go in for privatization. Later, it delves deeply into the unique service aspects of the New Delhi–Lucknow TE, which served as the main reason for its eventual success. Details about the future privatization moves of the IR are presented, along with the objections raised against the move. The case ends with the question of whether it is possible to successfully privatize the largest public service in a vast country like India and what the repercussions of such a move are likely to be.
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Issues
The case is structured to achieve the following teaching objectives:
Study the disparity between a public organization’s social and economic objectives and the way to overcome them.
Examine the economic, political, and financial objectives that drive privatization.
Evaluate the impact of government decisions on the business environment.
Assess the impact of either nationalization or privatization on the efficacy of a public utility.
Analyze the issues involved in the ownership and control of utilities that are privatized.
Privatization, Going Private, Nationalization, Benefits of Privatization, Privatization Process, State-Owned Enterprise Governance, Public-Private-Partnership (PPP), Privatization of Public Enterprises, Regulation of Privatized Utilities, Challenges of Privatization, Indian Railways, Tejas Express, IRCTC, Public Policy, Management Contracts
