Railway privatisation: Roadmap ready for bidding, revenue sharing — check details here

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The Indian Railways on July 6 laid out the contours of the public-private partnership (PPP) for operating passenger trains in Mumbai.

The private entities for undertaking the project would be selected through a two-stage competitive bidding process comprising Request for Qualification (RFQ)  and Request for Proposal (RFP).

RFQ  process will be for pre-qualification and shortlisting of bidders who will be required to offer share in the Gross Revenue at RFP stage (bid parameter) for undertaking the project.

The Gross Revenue would be finalised and specified in the Concession Agreement. It will be defined as:

1. Any amount accruing to the concessionaire from the passengers or any third party from the provision of following services to the passengers on account of running of trains under the concession agreement:

(a) Amount printed on ticket-fare;

(b) Amount  from  preferred  seat  options,  baggage/  luggage,  cargo/  parcel  (if not included in the ticket fare);

(c)Amount from on-board services such as – catering, bedroll, content on demand, wi-fi (if not included in the ticket fare).

2. Any amount accruing to the concessionaire on account of advertising, branding and naming rights pursuant to the concession agreement. The calculation of revenue shall exclude station User Fee collected from the users, and all statutory applicable indirect taxes,  levies which the concessionaire is bound to pay.

Each train will have a minimum of 16 coaches and will run at a maximum speed of 160 kmph.

Besides, the private entity shall be free to procure trains and locomotives from a source of its choice, provided such trains and locomotives are compatible with specification and standards specified in the Concession Agreement.

However,  the  Concession Agreement would include provisions relating to mandatory sourcing via  domestic production in India over a period of time.