Private players will begin rail passenger services by April 2023, and they will run only 5 percent of the Railways' total mail and express trains, the national transporter said on Thursday.
Addressing a press conference online, Railway Board Chairman VK Yadav also said that the ticket fares in these trains will be competitive with airfares on similar routes.
He said that private players in passenger train operations will mean a quantum jump in technology and coaches that run at higher speeds.
His statement came a day after the Railways formally kickstarted the process to allow private entities to operate passenger trains on its network by inviting request for qualifications (RFQ) for participation on 109 pairs of routes through 151 modern trains.
Allaying fears that the entire Railways network was being handed over to private parties, Yadav told the Thursday press conference that private participation in passenger train operations will only be 5 percent of the existing 2,800 Mail/Express trains.
“Private entities will only run 5 percent of the trains while the 95 percent, with the same ticket fares, will be run by the Railways. The poor will get a huge advantage with this, as on the same price they will get better facilities as technology and safety will improve,” he said.
He also said train sets have to be brought by private operators and maintained by them. “We are expecting that the private train operations will begin by April 2023.”
“The fares that private train operators decide will weigh in factors including airfares that come in the same segment and also AC bus fares and will fix the fares after comparing with them. I do not think that the fares fixed by private train operators will be too high, if they want to keep financial viability,” Yadav said.
The improvement in technology will also mean that the coaches that now require maintenance after running 4,000 km, will need maintenance after every 40,000-km, that is either once or twice a month, he said.
He also said that the introduction of private players would also mean that trains will be available on demand and that passenger waitlist will decrease.
¨The passenger sector requirement in 2019-2020 was 8.4 billion. That means we carried 8.4 billion passengers and we could not provide reservation to around 5 crore passengers per year.
“Their waiting list was dropped. The average drop in waiting list was 8.9 percent in 2019-20. During the busy season, 13.3 percent passengers were not able to get confirmed reservation.
¨Over a period of time in the last 70 years, we have not been able to develop our railway infrastructure in such a way that we can provide travel services to all our passengers. That has been the focus in the last six years. We should be able to provide train on demand for each and every passenger. This project is in continuation of the project of developing our infrastructure,” he said.
Yadav said that the private operators will also pay fixed haulage charges for path, stations, access to railway infrastructure and charges for electricity consumed.
He also said that Railways is currently operating in losses in the passenger segment and it aims to meet its expenditure through a minimum guaranteed cost that the private train operator will have to pay to the national carrier.
The private trains will operate in 12 clusters, including Bengaluru, Chandigarh, Jaipur, Delhi, Mumbai, Patna, Prayagraj, Secunderabad, Howrah, Chennai.
Yadav expects financial bids for private trains by February or March and to finalise financial bids by April 2021.
The project would entail a private sector investment of about ?30,000 crore, he said.
He said that the bids have been designed in a way that the Railways will be able to recover the minimum guaranteed cost.
“Right now we are making a loss in the passenger segment operation and basically we cross subsidise with the freight segment. In this particular project, what we have devised is that railways is not going to lose anything and ultimately the minimum cost which the private operator is going to pay will be able to meet the expenditure of the railways and whatever revenue we get over and above will be profit for the Railways,” he said.
When asked whether Chinese firms will be allowed to bid, Yadav said, ”There are guidelines under the Make in India Policy by the Department for Promotion of Industry and Internal Trade (DPIIT) and we will follow them.”
Among the criteria put forth by the Railways, is that the private entity has to ensure 95 percent punctuality and record not more than one failure per lakh kilometre of travel.
"If any performance indicators are not met by private players in passenger train operations they will be penalised,” said Yadav.
He also said that there will be a power meter in every locomotive and private operators will pay for the actual amount of energy consumed. This, Yadav said, will encourage them to keep their energy consumption low.
Opposition leaders on Thursday lashed out at the government over the Railways' decision to allow private entities to operate passenger trains.
While Congress MP Rahul Gandhi said the government has taking away the lifeline of the poor, the CPI(M) said that the move was ¨self-subservience, not self-reliance.¨
However, Yadav said, “By 2030, we will have 13 billion passengers, so as far as jobs are concerned, they will only increase in the Railways.”