Railway ministry resumes consultation on private train operations

Probable bidders for running private trains in the country are looking for lower operating costs.

According to officials in the know, the railways ministry has begun consultations with private-sector representatives for once again tendering routes to run commercial passenger trains.

The consultations gained relevance after the Railway Board had to scrap the first bid round due to lacklustre participation.

Representations before the ministry cite high costs of rakes, elevated haulage, and a mandatory base fare as matters of concern for the private sector.

“The currently fixed haulage for stationary and moving rakes are a matter of concern for the viability of private passenger rail operations. The static charge, levied on a rake that is parked, is around Rs 180 a coach for every hour while the moving charge is roughly Rs 800 a coach every hour. At least the static charge should be waived for these private trains and the moving charge be lowered,” an official aware of the discussions told Business Standard.

“There is also a minimum base fare for a berth, which will have to be paid to the railways irrespective of whether the train operates or not. This too is a matter of concern,” the official added.

The demand for a technical regulator, to ensure that track access is on a non-discriminatory basis, was also raised.

In July last year, the ministry had invited requests for qualifications for private participation for operating passenger train services. The plan was to cover 109 origin-destination pairs of routes through introducing 151 modern trains. It was estimated the project would entail an investment of about Rs 30,000 crore. This was the first such initiative in the Indian Railways’ network. 

The routes were to be awarded on the basis of revenue shares that bidders made.

In October last year, the ministry said it had received 120 applications for the 12 clusters from 15 firms. Among the participants were Megha Engineering and Infrastructures (MEIL), Sainath Sales and Services, IRB Infrastructure Developers, Indian Railway Catering and Tourism Corporation (IRCTC), GMR Highways, Welspun Enterprises, Gateway Rail Freight, and Cube Highways and Infrastructure III.

It was clear by July this year that only government-controlled IRCTC and MEIL had put in bids. 

This reflected poorly on the prospects of running these trains.