Understanding the benefits and drawbacks of including private companies in Indian Railways
Indian Railways had recently announced that they have launched the process of opening up train operations for private players on 109 origin-destination pairs of routes using 151 modern trains. The Indian Railways has invited requests for qualification proposals and shortlist bidders to run train operations. The project is expected to bring private sector investment of Rs 30,000 crore.
Early information reveals that private companies will be responsible for the financing and operations of the train along with its maintenance.
Various reports suggest that private companies like Adani Ports, Spain’s Talgo, France’s Alstom, Tata Realty, Macquarie group, Hyundai Rotem Company among others have shown interest in having a slice of the Indian Railways pie. These trains are expected to be operational by the year 2023.
Impact of Privatisation
A lot is going to change after private players take charge of some trains. The privatization of trains is expected to reduce transit time as trains will be designed for a maximum speed of 160 kmph. It will lead to job creation, provide enhanced safety, reduce the demand-supply deficit in the Indian Railways and provide a world-class travel experience to passengers.
Currently, Tejas Express is the only private train which is run by Indian Railways’ subsidiary IRCTC. Based on Tejas experience, it can be said that private trains are punctual, reliable and standard of service is way better than the Central government-owned trains. In fact, passengers get a refund if the Tejas express reaches the destination late.
All the new trains will be manufactured in India under the Make In India campaign. Private companies will pay fixed haulage charge, energy charge, a share in gross revenue determined through a transparent bidding process. This is expected to increase the revenue of Indian Railways.
However, the biggest concern about private trains is the travel fare. As we know IRCTC Tejas Express charges a good amount of money and follows dynamic pricing. These 109 trains might not be affordable for the lower middle class and poor people. Employees working in those trains apart from drivers and guards will not be a government employee.
The increased number of trains will increase the traffic on already busy routes of trains. Although, these trains will reach their destination on time but other trains especially freight trains, which accounts for almost 67 per cent of the total revenue of Indian Railways will have to suffer increased-travel time.
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