Modi government set to privatise 50 railway routes; private players will have right to determine fare

Going one step further to privatise the largest employer in India – The Indian Railways, the Modi government is all set to hand over 50 origin-destination routes to private operators in the near future.

A meeting in this regard was held by the Railways Board - the apex body under the Ministry of Railways on Friday.

According to sources, it was decided in the meeting that private players would be given permission to introduce/run “modern” trains also in order to increase the revenue of the Railways.

Attended by the Chief Operating managers of zonal railways, according to sources, it was decided in the meeting that routes for long-distance travel such as Delhi-Mumbai, Delhi-Lucknow, Delhi-Jammu, Delhi-Howrah, Secunderabad-Hyderabad, Secunderabad-Delhi, Delhi-Chennai, Mumbai-Chennai, Howrah-Chennai and Howrah-Mumbai, would be handed over to private players in the first phase of the project.

Depending on the ‘success’ of the project, more routes will be privatized, said the source.

“Zonal railways will examine the feasibility of introducing additional and new trains keeping in view the infrastructural projects and capacity enhancement works which are underway and those which are in the pipeline,” a spokesperson of the ministry was quoted as saying by the media.

However, most importantly, according to sources, the Modi government has agreed in principle to authorise private players to decide the fare.

“Only modalities have to be finalized,” he said.

“They (private players) will have the right to determine and collect fares in terms of a Concession Agreement,” reads a communique released by the ministry ahead of the meeting.

According to the communique, private operators would be selected through a “transparent” Request for Quotation (RFQ) and Request for Proposal (RFP) process.

“Under the proposal, private operators would be identified through a Participative Bid Process to run private passenger day/overnight train connecting important cities. It is contemplated that the private operators shall induct modern passenger trains and operate them on path allocated to them,” it says.