Railway Ministry holds first virtual conference for private investment on passenger trains

In a major development on Wednesday, the Ministry of Railways organised a pre-application conference for the first initiative of private investment for running passenger trains in India. Applicants were invited on board to hold the first pre-bid meeting on privatising passenger trains in Delhi. The Ministry received around 16 prospective applicants, reported news agency ANI. The ministry invited 12 requests for qualifications for private participation in the operation of passenger train services over 109 Origin Destination pair of routes through the introduction of 151 modern Trains (Rakes) which shall be in addition to the existing trains operated on the network.

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In a statement, the Railway ministry said, "This is the first initiative of private investment for running Passenger Trains over Indian Railway Network. The project would entail private sector investment of about Rs 30,000 crore. The initiative is towards improving the availability of transportation services to the people of this nation, introduce modern technology rolling stock and services that would improve the overall travel experience of passengers. Multiple operators in train operations will create competition and improve service delivery. This initiative is also intended at reducing the demand-supply deficit in the passenger transportation sector," the ministry added.

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What is the selection process?

The private entities for undertaking the projected will be selected through a two-stage competitive bidding process comprising of Request for Qualification (RFQ) and Request for Proposal (RFP), informed the ministry. Speaking on the queries on haulage charges, for which the Ministry replied that haulage charges will be specified "upfront and will be suitably indexed for the entire concession period" thereby bringing certainty in the haulage charges.

The ministry further said that it would "also be providing the details of passenger traffic being handled on the routes under biding. This will enable bidders to undertake their due diligence in the project." "The Ministry of Railways has clarified that trains operated under the project can be either purchased or taken on lease by the private entities. Ministry of Railways has also clarified that risks with regard to operation of trains shall be allocated to the parties in an equitable manner," they added. Ministry of Railways will be providing written replies to the queries received from the prospective Applicants by July 31. The second pre-application conference is scheduled for August 12.

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