Indian Railways Reassess Tender Process Worth Rs 30,000 Crore For Private Passenger Trains; here’s why
The ongoing tendering process for private passenger trains worth Rs 30,000 crore is being reassessed by Indian Railways. This is done because it has not received any interest from private actors for the call for tenders launched last year for the operation of such rail services in 12 clusters across the rail network. According to senior officials cited in a PTI report, of the 12 clusters, only three saw an offer. One official said offers in the current process may or may not be scrapped once the review is complete. Last year, in July, the Ministry of Railways launched tenders for private sector participation in the operation of passenger trains in twelve clusters. The plan involved up to 109 origin-destination pairs. A concession period of 35 years was to be granted to successful bidders on the basis of revenue.
In last year’s tender, a total of 16 private sector companies expressed interest in the private train project. During the recent call for tenders phase (financial call for tenders), this number decreased considerably with only two bidders. For three clusters, bids were submitted by the Indian Railway Catering and Tourism Corporation (IRCTC) and Megha Engineering and Infrastructure Limited, while all other bidding companies withdrew, citing concession rules favoring the national carrier, according to from sources cited in the report. Officials say some of the likely reasons that kept bidders away from the project include the lack of a regulator, payment of transportation costs in addition to revenue sharing, as well as restrictions on flexibility of routes.
As of July of last year, Indian Railways planned to launch phased private train services, with the first dozen trains scheduled to start operating in fiscal year 2023-24 and all 151 trains by 2027. According to the projection of the Ministry of Railways, by April 2021, the national carrier was supposed to identify the companies that will operate the private trains; the first 12 were expected to start circulating by 2023-24, followed by 45 more in FY 2024-25, the next 50 in FY 2025-26, and the last 44 by fiscal year 2026-27. Now the Ministry of Railways has returned to the drawing board to work out the terms of the entire project from scratch, sources added.