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Last Updated : Aug 25, 2020 04:19 PM IST | Source: Moneycontrol.com

Private trains: Railways can expect bidding war for some routes, feel experts

"The response has been very good. If there are 23 bidders and the high-yielding routes like Delhi-Mumbai and Delhi-Howrah, there is a possibility of a bidding war," Vinayak Chatterjee, Chairman, Feedback Infra, told Moneycontrol.


The private trains project of the Indian Railways has been able to generate the desired level of interest among private entities, according to experts.

They feel it won't be a surprise if the companies get into a bidding war for some premium routes.

"The response has been very good. If there are 23 bidders and the high-yielding routes like Delhi-Mumbai and Delhi-Howrah, there is a possibility of a bidding war," Vinayak Chatterjee, Chairman, Feedback Infra, told Moneycontrol.

But Chatterjee said the private companies would also like to get more clarity on a few aspects related to the arrangement that has been proposed by the Railways.

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"The nature and constitution of an independent regulator, designated speed of 160 km/hr, full cooperation in equitable use of track and signalling are some of the factors which would be playing on the minds of the private operators," he said.

The Delhi-Mumbai route will be a sought after route for private train operations, feels Rajaji Meshram, Partner, EY India.

"The paying capacity of citizens in chosen origin-destination cities will be a key consideration for private train operators. Routes where the DFCs will free up rail line capacity will be attractive. A 35-year concession period is long enough to earn good returns provided there is predictability of charges that will be levied in that period by Indian Railways," he told Moneycontrol.

Meshram said that India being the largest market in the world in terms of the railway passenger traffic, private operators might consider that  ridership will not be an issue.

"The private companies who have evinced interest know that India is an attractive market. They will obviously make their assessments and would seek changes to relevant clauses so that the risk-reward sharing is appropriate between government and private sectors. Active participation and deliberations in the pre bid process will lead to a more robust and sustainable business model for both sides," said Meshram.

As many as 23 companies participated in the second pre-bid meeting held on August 12. The list of participants included big names like Alstom, Siemens, Bombardier, GMR, L&T Infrastructure, Titagarh Wagons, CAF India, Sterlite Power, BHEL, BEML and IRCTC.

The private train project is expected to boost the revenues of Indian Railways, which has been trying to look at ways to reduce losses in the segment.

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First Published on Aug 13, 2020 07:08 pm
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