The Ministry of Railways said that this would require private sector investment of Rs 30,000 crore.

A train moving on a track with the light on
Money Railways Thursday, July 02, 2020 - 18:44

The Centre on Wednesday made the first step towards the privatisation of the Indian Railways, and invited Request for Qualifications(RFQ) from firms to operate train services on 109 routes through the introduction of 151 modern trains. Private train operations in the country will begin by April 2023, and the ticket fares in these trains will be competitive with airfares on similar routes, the Railways said on Thursday.

The 109 route pairs, the Railway Ministry said, have been formed into 12 clusters on the railway network. Financial Express reported that the 12 clusters in the tender are — 2 Mumbai clusters, 2 Delhi, Chandigarh, Howrah, Patna, Prayagraj, Secunderabad, Jaipur, Chennai and Bengaluru. 

Railway Board Chairman VK Yadav said that private players in passenger train operations will mean a quantum jump in technology and coaches that run at higher speeds.

Yadav said that private participation in passenger train operations will only be 5% of the existing 2800 Mail/Express trains over IR.

He also said that the introduction of private players would also mean that trains will be available on demand and that passenger waitlist will decrease. It will also share revenue with Indian Railways through competitive bidding.

The private entity has to ensure 95% punctuality and record not more than one failure per lakh kilometre of travel. "If any performance indicators are not met by private players in passenger train operations they will be penalised, said Yadav.

He also said that there will be a power meter in every locomotive and private operators will pay for the actual amount of energy consumed. This, Yadav said, will encourage them to keep their energy consumption low.

A request for qualification that the Railways qualified for is the first step, which is a screening process to have a pool of qualified bidders. After this, the selected companies will send in a Request for Proposal. 

This, the Ministry of Railways said, would require private sector investment of Rs 30,000 crore in what would be the first such initiative. . 

“The objective of this initiative is to introduce modern technology rolling stock with reduced maintenance, reduced transit time, boost job creation, provide enhanced safety, provide world-class travel experience to passengers,” it said.

The rules laid down include each train including having a minimum of 16 coaches, with a majority of trains having been manufactured in India, and the entity will be in charge of financing, procuring, operation and maintenance of the trains.

“Trains shall be designed for a maximum speed of 160 kmph. There would be a substantial reduction in journey time. The running time taken by a train shall be comparable to or faster than the fastest train of Indian Railways operating in the respective route,” it said. 

Presently, Rajdhani, Vande Bharat and Tejas are high-speed trains of the Indian Railways. 

This, the Ministry said, would be to introduce modern technology,

The objective of this initiative is to introduce railway vehicles which are based on modern technology with reduced maintenance, reduced transit time, can boost job creation, “provide enhanced safety, provide world-class travel experience to passengers' '. It said that it also wants to reduce the demand-supply deficit in the passenger transportation sector.

The private entity will get a concession period of 35 years — during which time it’ll be responsible for the financing, construction and operation. 

“The Private Entity shall pay to Indian Railways fixed haulage charges, energy charges as per actual consumption and a share in Gross Revenue determined through a transparent bidding process,” it says. 

These trains shall be operated by a driver and guard of the Indian Railways.

While it has earlier been questioned how the Railways would monitor a situation like this, a senior railway official told the Print that a Rail Development Authority would be set up by the Railways, which would be an independent body to decide rail fares to ensure that pricing is according to expenses. 

The Indian Railways gave its nod for privatisation in January, but the project has been in the pipeline since last year. 

It was earlier reported that the move to let private players run passenger trains attracted over two dozen firms, including Tata Realty and Infrastructure, Bombardier, Hyundai Rotem Company, CAF India, Hitachi India and South Asia, Essel Group, Adani Ports and SEZ, Talgo, Siemens and Alstom Transport.

Companies will have to bid for a network of routes and bids will be finalised on a revenue-sharing model.

Metro Man E Sreedharan had earlier told Mint that private parties may come, “but they will run away after a few months due to large losses. There is little room to raise fares”. Additionally, there is also the issue of priority when private firms and railways run on the same tracks, he said. 

With inputs from PTI

Become a TNM Member for just Rs 999!
You can also support us with a one-time payment.