We all have experienced delays in trains which sometimes take hours to reach the destination, but this won’t be the story any longer as Indian railways announced the privatization of trains on 1st July 2020. The government has invited request for qualifications ( RFQ), ( RFQ is generally a screening step to establish a number of vendors who are eligible to submit responses to the request made by the entity) which was floated on 8th July 2020 and is likely to be finalised by November 2020. For which the potential investors are Adani group, Tatas, Bombardier as of now.
The Indian railways have provided a timeline as to when the private trains will be on track. Railways have planned to introduce 12 trains in 2022-23, 45 more in 2023-24, 50 in 2025-26 and 44 in the FY27 taking the total to 151 by end of FY27.
Under this project total of 151 modern trains will be introduced on 109 pairs of routes for initial operations, this means only 5% of total trains will be operated by private players, rest 95% would be operated by the Government of India. This step was necessary for the betterment of Indian railways as currently, the railways are operating at an operating ratio of 98.5% as of 2018 ( operating ratio of 98.5% means the government needs to put in 98.5 rupees to earn 100 bucks) also as of 2019-20 data roughly 5 crore passengers were not accommodated, meaning their waitlist ticket wasn’t confirmed indicating a gap between demand and supply which is expected to widen in future years. Also in the coming 12 years, India would need approximately 50 lakh crores for its operation.
The privatization will help railways fill their coffers and use the money for the betterment of existing systems. The project is expected to attract 30,000 crores investment by private players. Apart from the huge investment, the private entities have to pay fixed haulage ( haulage means charge for the commercial transport of goods), energy charges as per consumption, and a share in gross revenue earned by firms through the bidding process. Apart from these benefits, the government would be giving a boost to “make in India” policy as the private players would be manufacturing trains within India and they will be responsible for financing, procurement, operation, and maintenance which will create jobs and utilization of local components for manufacturing.
Private trains will not only benefit the government but will also be boon for citizens as they would get better services, faster and safer transport than that of government trains.
On the other side, the negatives are higher fares which would impact the poor people who depend upon trains for daily transport from one city/state to another city/state. Another fear is to SCs, STs, and other backward classes that they may lose their job due to lack of reservation in the private sector.
Keeping both sides of the coin in mind, I feel this step was much needed as Indian railways are much behind in comparison to speed, facilities, safety, maintenance, etc. when compared to other countries. If India needs to outperform other countries in the railway segment, this is the first step which can be followed by other steps keeping all income categories in mind.
Write-up by: Samarth Desai
Much informative! Thanks ✨💯
Well said bro👏💯