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News Entry# 460485
Jul 28 (21:03) Limited response to Indian Railways’ private operations tender (

News Entry# 460485  Blog Entry# 5027037   
  Past Edits
This is a new feature showing past edits to this News Post.
Posted by: Ravi~ 237 news posts
INDIAN Railway’s (IR) much publicised plan to operate private passenger services on the mainline network has failed to take off after state-owned Indian Railways Catering and Tourism Corporation (IRCTC) and the Megha Group were confirmed as the only participants when bids were finally opened on July 23, 18 months after the tenders were floated.

Companies including Larsen & Toubro, GMR, Gateway Rail, Cube Highways, BHEL, CAF, Welspun and PNC infra, which had expressed interest in the project, did not participate.

Offers were received for just three of the 12 clusters identified for private train operations: the Mumbai-2, Delhi-1 and Delhi-2 clusters. Since the IRCTC has offered a substantially higher rate of revenue sharing – 18%, 15% and 6% respectively for the three clusters – it is likely to win the contracts.

The ambitious plan was announced last year, with the bidding process getting underway in July 2020. A 35-year concession is proposed in tender documents, with the concessionaire required to introduce their own rolling stock and locomotives, and pay fixed charges for paths, stations, access to railway infrastructure and electricity consumed. IR will provide the guard and driver. In addition, private operators are required to share revenue with IR on a ratio decided through the competitive bidding process.

However, several private operators confirmed in March that they would not be participating.

According to an official press release, the Railway Ministry will expeditiously complete the evaluation process and decide the winners. The statement says 29 pairs of services requiring 40 modern trains and an investment of Rs 72bn ($US 1bn) will be operated in the first phase. IR was targeting the introduction of 109 services by 2023-2024.

Unreasonable clauses
Private investors apparently backed out because of “unreasonable clauses” contained in the tender document. One of the first companies to make an exit was Gateway Rail. “Railways do not have the infrastructure to maintain speeds of 160km/h,” says CEO, Mr Sachin Bhanushali. “However, the tender documents made it mandatory for private players to bring in rolling stock fit for 160km/h. The second issue was about sourcing, as such trains are not available in the Indian market.”

Bhanushali adds that the private parties demanded that an independent regulator be established to settle possible disputes. “But IR was unwilling to address these concerns,” he says.

Rail consultants point to other anomalies in the tender documents. For instance, they state that track access charges paid to IR would increase on an annual cumulative basis. However, there was no reference to whether passenger fares would increase correspondingly. Second, IR officials were unwilling to concede the demand that the concession agreement should have a “bankable status,” in order to make it possible for private companies to take out bank loans. Third, the tender documents make it clear that the private parties cannot make an exit before they have brought in the new trains.

“Earlier initiatives of IR to set up locomotive factories under the public-private partnership (PPP) mode gave fruitful results because of engagement amongst both the parties to address the concerns,” says rail consultant, Mr Harsh Dhingra. “I wish a similar process had been adopted in this bid as well.”

3 Public Posts - Wed Jul 28, 2021

Jul 28 (22:47)
Back to Muri
Brandon12663^~   28704 blog posts
Re# 5027037-4            Tags   Past Edits
Absolutely right
Perfect response by the pvt companies

Jul 28 (23:00)
satyajeet~   1879 blog posts
Re# 5027037-5            Tags   Past Edits
All issues mentioned by private players are valid. This culture is reason of loss in IR. Private players just showed mirror

Jul 28 (23:11)
The train
RailwaysTheLife~   243 blog posts
Re# 5027037-6            Tags   Past Edits
Practically, private players have no relation with punctuality. Punctuality depends on controllers who control the train on tracks. Private players cannot be made responsible for punctuality.

Jul 28 (23:19)
IlovemyINDIA~   2533 blog posts
Re# 5027037-7            Tags   Past Edits
Because of security reasons and also to maintain the whole railway setup, Controlling needs to be kept in the hands of Indian Railways, because private players ftom India as well as Global are involved in this package, so u cannot leave Controlling in the hands of private players. Also, since in IR both government and private players will run trains, so leaving Controlling in the hands of private players with destroy the balance between govt trains and different private companies and also will create chaos. Also, politics is also involved in IR so leaving Controlling in the hands of private players will have regional political influences also more.
I still believe, running private trains in India is
never going to be a profitable. A country where a huge population is middle class and below middle class, how can a costly private train travel with travel time just few hours lesser than Govt runned trains can be profitable. Airlines are favoured by people because travel time is very less compared to trains, but this will not happen in trains. It is i believe a poor strategy by government. I think those private players who have opted out of this pkg has done a clever job.
In India you cannot maintain 160kmph end-to-end because of its geography, culture and habits which vary from one place to another and also population is higher here.

Jul 31 (18:19)
G_I_P_R^~   7174 blog posts
Re# 5027037-8            Tags   Past Edits
In many countries, railways have been successfully run by private organisations after de nationalisation of railways, for eg, UK, France.

In the USA, bulk of passenger traffic is handled by Amtrak, but it is a PSU.

you expect private players to maintain the same level of operations, then NO, it would not be enough to run all services profitably. Infact, many services would be culled for want of profitability or be subsidised by govt, which would defeat the whole purpose.

Then there is always fear of crony capitalists taking advantage of the system, govt as such always behaves like a toothless tiger.

Some middle ground will need to be achieved or else, we can all keep mum on this and suffer the travesty which IR doles out in the name of service.
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