100 railway routes identified to roll out 150 private trains

Indian Railways has identified 100 routes which includes Mumbai-Delhi and Howrah-Delhi routes to roll out about 150 private trains. A high-powered panel has cleared the road for privatisation which will compete with Rajdhani.

As per news source, Amitabh Kant, CEO of NITI Aayog said that the request for proposal for the country’s most unique opportunity of bringing in private sector players into train operation will be rolled out in the next one week.

Kant said that the routes and train sets are already recognized. The concession agreements have all been structured

"The projects were finalised and then they went to the PPAC (Public Private Partnership Appraisal Committee) committee which approved it and then we have had a stakeholder consultation and there was a very good response," he said.

He said that a detailed exercise to identify 10 railway stations has taken place which will be up for bidding by private sector. Kant is hopeful that the bidding process will attract some of the best players from the world. He is also hopeful that with this privatization, greater efficiency will come in the operation of train sets and 10 railway stations.

Kant mentioned that the main challenge of privatization in railways is the haulage rates are very high which makes the project commercially non-viable for companies.

"For the first time what we have done is that we have tried to bring down the haulage rate without loading all the other inefficiencies so that we are able to ensure a win-win situation which takes care of the interest of the government as well as the private sector," he said.

Kant is confident of a "fine concession agreement" which will ensure that there is a huge amount of private sector interest. "We are taking the feedback of the private sector into this."

Kant said that they have largely considered metro routes like Delhi-Mumbai or Delhi-Calcutta to make the proposal fairly attractive for the bidders. "We had a tough job to bring ourselves to the conviction that we need to do it to the right haulage charge which has now been agreed upon."

According to Kant, the railway fares are over-subsidised in India. He said that the decision to hike passenger train fares was taken as over a period of time, the freight fare had been increased whereas the passenger fare had not. "We had done gross injustice to railways by not having a tariff regulator."

"This entire pricing system needs to be deregulated and it needs to have an independent regulator, it needs to be taken out of the administrative system of the railway and therefore this was much called for otherwise the operating ratio of the railways had gone totally haywire," said Kant.