20 Companies Show Interest in Running Private Trains

About 20 companies in infrastructure and transportation sectors, including Bombardier India, Adani Ports, Alstom, Talgo, Macquarie group, Tata Realty, among others, have evinced interest in operating private passenger trains in India.

Bids for the operating 150 private trains on hundred routes will open in the next two to three months and contracts are likely to be awarded in the next fiscal. Niti Aayog has estimated an investment opportunity of Rs 22,500 crore in the segment. The 2019-20 budget had pegged the national transporter’s requirement of infrastructure investment at Rs 50 lakh crore over 12 years, necessitating the involvement of private players in the sector.

In two meetings held on December 31 last year and January 20, companies across sectors were present to discuss the modalities of the project. NIIF, Hyundai Rotem, CAF India, Hitachi India, Medha Servo, Thoth Infrastructure, CRRC ZELC, BEML, Siemens, IRCTC, Bharat Forge, Gatx, Gateway Rail Freight, KEC International, Essel Group and RK Associates were among the other players present at the stakeholders meet.

“Companies present at the meeting raised concerns around proper risk allocation in the contract,” an official close to the development said. “At the end of the day, this is a contract, and people need to be sure that in case one party reneges on it, what would be the mechanism going forward,” the official said. The official quoted above said a railway regulator, which will look into pricing of tickets in these trains, among other issues, will bring in some comfort for private players.

Earlier this week, the Railway Board Chairman VK Yadav said it will take at least two years for private trains to be operational on ground. While a pilot has already been conducted, with IRCTC having started operation of two trains over the last six months, the Indian Railways is still working on finalising a request for qualification (RfQ) document for these tenders.

A draft RFQ document prepared by Niti Aayog proposed grant of concession to private players for running 150 passenger trains on 100 paths bundled into 10-12 clusters with a 35-year concession period. The Indian Railways currently faces huge supply side constraints and is unable to meet the demand in the passenger segment.

Projects like the dedicated freight corridors and multi-tracking, which essentially means laying additional track on a particular route, will ease congestion and enhance its network. It would also mean more business for the private sector.

Currently, the railways runs around 13,000 passenger trains on its network, but around 20,000 trains are required to meet the demand, Yadav said. The Indian Railways is expecting a jump of around 60-70% after upgradation of its network.