Private trains: Despite huge interest, too early to uncork the bubbly

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Private trains: Despite huge interest, too early to uncork the bubbly


The Indian Railways may have got a good response to the private train operations with over 100 firms making it to the Request for Proposal (RFP) stage, but companies interested in the project are yet to get answers to some of the concerns they feel are extremely important before they can commit huge investments.

According to a consultant advising a shortlisted bidder, there is still a long way to go before any concrete view can be formed. There is still very little clarity related to detailed terms and conditions.

“The draft concession agreement is not yet out and a number of factors like technical specifications, regulatory framework, freedom of departure slots, stops, speed, usage of rakes, etc. are an area of concern for the companies. We have not received answers to a lot of queries till now. It’s one thing to evince interest and there is obvious interest but a completely different thing to get serious bids,” he said.

The Railways has said it will provide Request for Proposal (RFP) soon.

The consultant pointed out that unless the sticky points are addressed, it is not viable for any company to commit the large capex required for this project.

“A private entity brings in speed and efficiency, but a private enterprise would require flexibility which this bid lacks in the current form. In which sector can a competitor decide timing, route, stops, rake usage for a player? Railways should think long-term on all the aforementioned issues and not as a competing service provider. The confusion surrounding the regulator is also a major issue. If this sector is to get a regulator, it should be prior to the bid and not post-facto. You cannot have a bid and then put a regulator later on. Anyone who puts in a bid won’t have any idea about the regulatory impact down the road,” he added.

He, however, ruled out that there would be a COVID-19 hangover over the project.

The Tejas Express, run by IRCTC, has been forced to stop operations due to  low occupancy levels.

The firms who have evinced interest in the private trains project include the likes of GMR, L&T, Cube Highways, BHEL, among others. The Railways hopes to start private train operations by March 2023.

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