Chugging along private route

Competition in running trains can break existing rigidity and meet demand-supply gap

AuthorPublished: 3rd Jul 2020  12:00 amUpdated: 2nd Jul 2020  7:09 pm

Indian Railways’ decision to invite proposals from private companies to run 151 modern passenger trains on 109 routes is a welcome development. This will be the first initiative of private investment for running passenger trains and is expected to introduce modern technology, reduce travel time, boost job creation, provide enhanced safety and world-class travel experience to passengers and also reduce demand-supply deficit in the passenger transportation sector. In the initial stage, the project would entail private sector investment of about Rs 30,000 crore. From passenger safety to modern GPS-enabled announcement systems, the Railways has made a list of new technologies that private trains may include in them. The firms will have the freedom to decide fares and offer a basket of services. They will be allowed to run these trains for a 35-year period in return for a share in the revenues, apart from payments in the form of haulage charges for using public infrastructure. India has the largest railway network in the world with around 13,000 trains and 12 lakh employees. A major chunk of passenger services runs on subsidy — leading to big losses over the years that the ministry has been unable to recoup. According to a document jointly prepared by the Niti Aayog and the Railways Ministry, the government is looking at a “paradigm shift in passenger train operations” to deliver “world-class service” to commuters. Private trains will be designed for a maximum speed of 160 kmph, thereby reducing the journey time substantially.

The competition in running trains can break the existing rigidity in the railway system and meet the demand-supply gap. According to official figures, reserved passengers accounted for 18% of all travellers in non-suburban trains last year and the Railways had failed to provide berths to a staggering 89 million wait-listed passengers. Capacity constraints — existing routes operating at full capacity — have led to trains steadily losing passenger traffic to other modes of transport. Between 2013 and 2018, reserved passenger traffic on the Railways grew at less than 5% while the growth in air traffic was 13% during the same period. There is a need to modernise the functioning of the Railways. The privatisation move will not only end the longstanding monopoly of the national transporter in running trains but will also start a rush of private investment into the Railways. The private entities will be responsible for financing, procuring, operation and maintenance of the trains, which will be operated by the driver and guard of the Indian Railways. When privatisation was introduced in civil aviation and telecom, there were several naysayers but the people have benefited from competition. It is now time for the Railways to change.


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