According to individuals familiar with the issue, the Ministry of Railways has decided to put on hold the tender for running 151 private trains over 109 important routes for an estimated expenditure of 30,000 crore and would reevaluate the process, owing to a lacklustre response from private operators.
“Due to lesser participation from private enterprises, the tender for private trains has been cancelled, and the entire procedure will be revalued. A new tender will be issued by the railways,” a senior ministry official said. Only three of the 12 clusters placed up for bidding received any bids, according to the official.
On July 1, 2020, the national carrier began the legal process of allowing commercial trains on 109 routes—a process that aimed to open up one of the government’s most significant industries for the first time. Only two bidders, IRCTC and Megha Engineering & Infrastructures, showed interest in the financial bidding stage, with IRCTC, which is majority-owned by the government, expected to win the contract after proposing a higher revenue sharing number. Officials said this raised doubts about the purpose of using private companies to run trains.
According to the government, the proposed investment is expected to be around 30,000 crores, with the majority of the rakes (70 percent) being constructed in India; private organisations approved to run the railway services will be responsible for funding, acquiring, operating, and maintaining the trains. The winning bidders were to be given a 35-year concession period on a revenue basis.
Indian Railways announced in July last year that it would phase in private trains into its network, with the first dozen expected to begin service in the 2023-24 fiscal year and all 151 by 2027. The transporter was meant to pick the businesses that will run the private trains by April 2021, according to the railway ministry’s forecasts; the first 12 were slated to start running by 2023-24, followed by 45 more in FY 2024-25, the next 50 in FY 2025-26, and the last 44 by 2026-27.
Last year, the ministry issued a request for qualification (RFQ) to private companies to run 151 trains across these routes, laying out specific conditions that must be met in an effort to “introduce modern technologies and world-class services” to one of India’s most popular modes of transportation.
The trains were to be run in 12 clusters across the Indian Railways network, according to the government. Secunderabad, Chennai, Howrah, Jaipur, Prayagraj, Chandigarh, Bengaluru, and Patna will each have two clusters, and Secunderabad, Chennai, Howrah, Jaipur, Prayagraj, Chandigarh, Bengaluru, and Patna will each have one cluster.
Arvind Aviation, BHEL, Construcciones y Auxiliar de Ferrocarrriles, S.A, Cube Highways and Infrastructure III Pvt Ltd, Gateway Rail Freight Limited, GMR Highways Limited, Indian Railway Catering and Tourism Corporation Limited, and IRB Infrastructure Developers Limited were among the companies that applied for the clusters.
L&T Infrastructure Development Projects Limited, Malempati Power Private Limited, Megha Engineering and Infrastructures Limited, PNC Infratech Ltd, RK Associates and Hoteliers Pvt Ltd, Sainath Sales and Services Pvt Ltd, and Welspun Enterprises Limited were among the other companies. In the beginning, 14 Indian companies and one Spanish company expressed interest in operating private trains in India.