India has the fifth largest railway network in the world where the Ministry of Railways, Government of India (MOR) manages and operates trains on the Indian Railway network. Despite the size of the network, there is a huge unmet demand due to capacity constraints resulting in loss of passenger business to other modes of transport. This has resulted in a critical requirement for next generation technology and the provision of higher service quality to ensure improved coach experience and reduced journey time.

With the objective of improving user experience, the MOR had been discussing the initiative of permitting private entities to undertake passenger train operations on selected routes. The MOR has taken the first step in this regard by issuing request for qualification (RFQ) on 1 July 2020. Till now, the Indian Railway Catering and Tourism Corporation Limited (a Government of India owned listed entity) was the only private entity permitted to operate passenger trains on select routes.

Selected routes for private players 

The private passenger trains will be operating on the Indian Railway network, and the MOR has identified hundred origin destination pairs by grouping them into twelve clusters. As of now, Delhi, Mumbai, Chandigarh, Howrah, Patna, Prayagraj, Secunderabad, Jaipur, Chennai and Bengaluru form part of the list and the MOR has proposed to further update the list to make the final list available at the request for proposal stage (RFP).

Private players to alter the landscape of the Indian Railway network

The award of concession will be for a period of thirty-five years on the basis of a two-stage competitive bidding process comprising of the RFQ and the RFP. The RFQ process is aimed at pre-qualification and shortlisting of bidders based on their financial capacity, who will be required to offer share in the gross revenue at the RFP stage.

The MOR will be providing non-discriminatory access to private train operators to the Indian Railway track and signaling network. The operation of passenger trains by private parties is likely to alter the landscape of the Indian Railway network. Effectively, the overarching control of the Ministry of Railways on rolling stock, railway tracks and manpower engaged in services will diminish.

While the existing trains would continue to operate, the running time of the trains being operated by private parties would be comparable to the fastest train of the Indian Railway operating between such stations on that route. There are several speculations around the fact that operation of trains by Indian Railways and private parties on the same routes may lead to malpractices and increased corruption.

The time-tabling with remain the responsibility of the MOR to ensure that all premium time slots are not taken by private parties. However, it will be interesting to witness the slots allocated to the trains being operated by private parties – firstly, to ensure that the fares remain affordable and secondly, to enable the private parties to meet their costs.

Fare – for the private operators and for the passengers

The private parties operating the passenger trains will offer share to MOR in the gross revenue. Such private parties will have the right to determine and collect fares from users. This decision has evoked strong resistance from users due to the apprehension that the services may become unaffordable for the poor as well as the middle-class population.

Undoubtedly, private parties would not be interested in providing world-class travel experience to passengers by operating on uneconomic conditions. Therefore, it is likely that the fare may cater to passengers who may be able to afford higher fares.

While the objective of allowing private parties to operate passenger trains is to reduce the demand-supply deficit in the sector, it will be interesting to witness the manner in which modern technology rolling stock ensuring reduced transit time would be made accommodated in an affordable fare.

While the MOR has stated that private parties operating the passenger trains would enhance the passengers’ services in trains and will help the MOR in increasing earnings, it is imperative to have sufficient checks and balances so that the implementation  of private participation does not drastically affect the affordability of train journeys for the common man in India.

Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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