Indian Railway will hand over train services to the Private Operators?

(a) whether the Government has decided to hand over the long distance train services to the Private Sector in the Country?

Shri Kodikunnil Suresh, member of the sixteenth Lok Sabha asked the following UNSTARRED questions in the Loksabha on Privatisation of Indian Railway.

Will the Minister of RAILWAYS be pleased to state:

• Whether the Government has decided to hand over the long distance train services to the Private Sector in the Country;

• If so, the details thereof along with the details of the services, routewise and the name of companies to whom such services are likely to be allocated;

• Whether the Government has estimated an income that is to be generated through the Privatization of railways;

• if so, the details thereof;

PPP Initiatives in Indian Railway to boost Infrastructure

The information given by the Minister of Railways and Commerce & Industry, Shri Piyush Goyal in a written reply to a question in Rajya Sabha on 16.09.2020 is as below.

Answer to Lok Sabha Question No 581...

No Sir,

It is estimated that Indian Railways would need Capital investment of around ₹ 50 lakh crore upto 2030 for network expansion and capacity augmentation, rolling stock induction and other modernization works to enable better delivery of passenger and freight services and to improve its modal share in transport. To bridge the gap in capital funding and to induct modern technologies and improve efficiencies, it is being planned to use Public

Private Partnership (PPP) model for few initiatives. One of the PPP initiatives is to invite applications to invest and induct modern rakes over selected routes to provide world class services to the passengers.

As part of this initiative, Ministry of Railways have issued 12 Requests for Qualification (RFQs) on 1^st July, 2020 for operation of passenger trains over approximately 109 origin destination pairs (divided into 12 clusters) through PPP on Design, Build, Finance and Operate (“DBFO”) basis.  The routes are spread across the entire Indian Railway network and the list is available in the public domain.

The details of the participants will be known after the application due date, i.e. 07.10.2020. The selection of the operators will be done through a transparent bidding process and so far, no passenger train service has been allocated to any private company. The revenue which shall be generated under this initiative can be estimated upon the completion of the bidding process.

• Also Read Indian Railways completed stage-1 (RFQ) for Operation of Private Trains.

151 Private Trains to be run from 12 Clusters

Ministry of Railways has recently invited Request for Qualifications (RFQ) for private participation for operation of passenger train services over 109 Origin Destination(OD) pairs of routes through introduction of 151 modern Trains (Rakes).

As part of the Biding Process, Ministry of Railways has conducted first pre-Application Conference on July 21, 2020 which has received an over-whelming response with participation of around 16 prospective Applicants. The issues and concerns raised by the prospective Applicants were discussed and clarifications were provided by the officials of Ministry of Railways and NITI Aayog for improved clarity on the provisions of RFQ and bidding framework. The queries were mainly related eligibility criteria, bid process, procurement of rakes, operations of trains and composition of clusters. 

• 151 Private Trains to be run by Private operators once the selection  process is over, would be over and above the already existing trains .

• 2 Stage Selection Process: The private entities for undertaking the projected will be selected through a two-stage competitive bidding process comprising of Request for Qualification (RFQ) and Request for Proposal (RFP). 

• Fixed Haulage charges: There were queries on haulage charges for which Ministry of Railways has replied that haulage charges will be specified upfront and will be suitably indexed for the entire concession period thereby bringing certainty in the haulage charges. The Private Train Operators 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.

• Lease or Purchase of Trains: Ministry of Railways has clarified that trains to operated under the project can be either purchased or taken on lease by the private entities.

• Equitable Risk: Ministry of Railways has also clarified that risks with regard to operation of trains shall be allocated to the parties in an equitable manner. 

• Loco Pilots / Guard: The driver and guard of the trains will be Railway officials.

• Safety: The safety clearance of trains will be done by Railways only.

• Make in India: Majority of Trains to be manufactured in India (Make in India). The private entity shall be responsible for financing, procuring, operation and maintenance of the trains.

• Speed 160 KMPH: Private Trains shall be designed for a maximum speed of 160 kmph. 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.

• 16 Coaches trains: Each Train shall have a minimum of 16 coaches

• 35 Years: The Concession Period for the project shall be 35 years.

• 12 Clusters, 10 Cities for originating trains

Why the Private Train Services?:

Indian Railways network is about 68,000 route kilometers. In the year 2018-19, the reserved passenger volume was 16% (0.59 billion) of the total originating non- suburban passengers (3.65 billion).  Almost 8.85 crore of waitlisted passengers could not be accommodated.

Ministry of Railways felt the requirement to introduce private participation in passenger train operation which will allow introduction of next generation technology and provision of higher service quality, ensuring use of improved coach technology and reduced journey time.

These train services would be operated on the Indian Railway Network where at present both passenger and freight trains are  being operated on the common track. The major trunk routes are saturated and operate at near full capacity.

However, with planned commissioning of Dedicated Freight Corridors in 2021 and other infrastructural works, there would be availability of additional paths for operation of additional passenger services and it would therefore be possible to run additional services utilizing modern trains proposed in  the current initiative.

The Objective of running Private Trains:

This is Phase-I process of running of 151 Private Train Services. These 151 private trains will be run in addition to already running private trains like Tejas.