RAILWAYS MAY SCRAP PVT TRAIN OPERATION TENDER

The Indian Railways may cancel the first round of bids it had called for private train operations. According to officials in the know, the Ministry of Railways is rethinking the viability of these operations after it received just two bids for the ambitious programme. “The evaluation of these bids is on. As of now, the process is still on,” a railway ministry spokesperson told Business Standard.

The Indian Railways may cancel the first round of bids it had called for private train operations. According to officials in the know, the Ministry of Railways is rethinking the viability of these operations after it received just two bids for the ambitious programme.

“The evaluation of these bids is on. As of now, the process is still on,” a railway ministry spokesperson told Business Standard.

In July 2020, the rail ministry had invited Request for Qualifications for private participation for operation of passenger train services over 109 origin destination pairs of routes through introduction of 151 modern trains. It was estimated that the project would investment of about ~30,000 crore. This was the first such initiative in the Indian Railways network.

Later in October 2020, the ministry said it had received 120 applications for the 12 clusters from 15 firms. In November 2020, 102 applications were found eligible to participate in the Request for Proposal (RFP). The ministry had sought to award all the clusters by February.

Among the participants were Megha Engineering and Infrastructures (MEIL), Sainath Sales and Services, IRB Infrastructure Developers, Indian Railway Catering and Tourism Corporation (IRCTC), GMR Highways, Welspun Enterprises, Gateway Rail Freight, and Cube Highways and Infrastructure III.

Malempati Power, L&T Infrastructure Development Projects, RK Associates and Hoteliers, Construcciones y Auxiliar de Ferrocarriles, PNC Infratech, Arvind Aviation, and BHEL had also qualified.

However, when actual bids were opened in July 2021, IRCTC and MEIL were the only two firms that actually put in bids. This reflected poorly on the prospects of running these trains. IRCTC was also on the lookout for a partner to foot the bill of recurring costs that come with private train operations.

According to officials in the know, talk of scrapping these bids and coming out with a fresh tender for private participation has been gaining steam over the past week. The new bids will include more relaxed revenue share commitments and even waiver of some fixed charges to attract bidders.

“The current bids for private trains were not financeable. The bidders needed three major changes. One, a technical regulator, to ensure that track access is on a non-discriminatory basis. Two, assurance that premier trains operated by railways would not be able to offer subsidised price. Three, low to nil haulage charge, to make the demand risk more manageable,” Manish Agarwal, infrastructure specialist and co-founder of Askhowindia.org, told