Indian Railways re-evaluating bidding process worth Rs 30,000 crore for private passenger trains; here’s why

By: |
August 19, 2021 11:42 AM

Last year in July, the Railway Ministry rolled out bids for the participation of the private sector in operations of passenger trains in twelve clusters.

private trains, railwaysDuring RFQ last year, a total of 16 private sector companies showed interest in the private train project.

The ongoing bidding process for private passenger trains worth Rs 30,000 crore, is being re-evaluated by Indian Railways. This is being done as it failed to receive any interest from private players for the tender, which was floated last year for the operation of such train services in 12 clusters across the rail network. According to senior officials quoted in a PTI report, of the 12 clusters, only three saw any bid at all. An official said the bids of the present process may or may not be scrapped after the review is over. Last year in July, the Railway Ministry rolled out bids for the participation of the private sector in operations of passenger trains in twelve clusters. The plan involved as many as 109 origin-destination pairs. A 35-year concession period was to be provided to winning bidders on a revenue basis model.

During RFQ last year, a total of 16 private sector companies showed interest in the private train project. In the recent RFP stage (financial bidding), this number reduced significantly with only two bidders coming forward. For three clusters, bids were submitted by the Indian Railway Catering and Tourism Corporation (IRCTC) and Megha Engineering and Infrastructure Limited, while all other bidder firms backed out, citing concession rules favouring the national transporter, according to sources quoted in the report. According to officials, some of the likely reasons that kept bidders away from the project include the absence of a regulator, haulage charges payment in addition to revenue sharing, as well as curbs on route flexibility.

In the month of July last year, Indian Railways planned to launch private train services in phases, with the first dozen of trains due to start operating in the financial year 2023-24 and all 151 trains by the year 2027. As per the projection of the Railway Ministry, by April 2021, the national transporter was supposed to identify the firms that will run the private trains; it was expected that the first 12 will start plying by the year 2023-24, followed by 45 more in the financial year 2024-25, the next 50 in fiscal 2025-26 and the last 44 by the financial year 2026-27. Now, the Railway Ministry has gone back to the drawing board to chalk out the modalities of the entire project from scratch, sources added.

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