Budget 2021: Indian Railways To Seek Investment Of Rs 30,000 Crore For Running Private Trains

Railway Budget 2021: Tejas Express trains are among the fastest trains in the country
Railway Budget 2021: Tejas Express trains are among the fastest trains in the country

Union Budget 2021: As part of Indian Railways' first private investment initiative for operating passenger trains, the Railway Ministry earlier this year, completed the process of evaluating applications for public-private partnership (PPP) in passenger train operations. Out of the 120 applications,102 applicants were found eligible to participate in the request for proposal (RFP) stage. Infrastructure majors such as Larsen & Toubro (L&T), BHEL, and GMR were among the 102 eligible operators qualified to bid in the first stage. Indian Railways sought private investment of around Rs 30,000 crore for running modern passenger train operations. (Also Read: Public-Private Partnership In Indian Railways: 102 Applications Eligible To Bid For Passenger Train Operations )

The Indian Railways Catering and Tourism Corporation (IRCTC) is also one of the leading applicants qualified to participate in the RFP stage. The Railway Ministry had invited the request for quotation for private sector participation for passenger train services over 109 origin-destination (OD) pairs of routes through the introduction of 151 modern trains or rakes. The 109 OD pairs of routes have been formed into 12 clusters across the railway network. Railway authorities had started taking applications from October 7, 2020. The private entities for undertaking the project will be selected through a two-stage competitive bidding process consisting of request for quotation (RFQ) and request for proposal (RFP), Ministry of Railways had said in July 2020.

Here Are Features Of Indian Railways' Project For Operating Private Trains:

  • The private trains will be designed for a maximum speed of 160 km per hour, resulting in a reduction in the overall journey time. The running time of a train will be comparable to or faster than the fastest train operating in the respective route.
  • The objective of the project is to introduce modern technology rolling stock with reduced maintenance, reduced transit time, greater passenger safety, and reduced demand-supply deficit in the passenger transportation sector.
  • The private entity will pay for fixed haulage charges, energy charges as per the actual consumption, and a share in the gross revenue determined through a transparent bidding process. 
  • The private entity will be responsible for procuring, financing, operating, and the maintenance of these private trains. The concession period of the project is 35 years.

In Budget 2020, Finance Minister Nirmala Sitharaman had announced the introduction of 150 private trains across the national rail network in the next three-four years. The Finance Minister also announced that more Tejas Express-style trains will be introduced on some of the major tourism routes. The Tejas Express trains, operated by IRCTC are a more premium version of the Shatabdi Express-style air-conditioned chair car trains.