India has the fifth largest railway network in the world where the Ministry of Railways, Government of India (MOR) manages and operates trains on the Indian Railway (IR) network. Despite the size of the network, there is a huge unmet demand due to capacity constraints resulting in loss of passenger business to other modes of transport. This has resulted in a critical requirement for next generation technology and the provision of higher service quality to ensure improved coach experience and reduced journey time.

With the objective of improving user experience, the MOR has decided to permit private parties to undertake passenger train operations on selected routes on public private partnership. Some key critical factors in this regard are discussed below.

Determination of fare

On the lines of the practice in the aviation sector, private parties operating the passenger trains will be given a free hand in determining the fares of such trains. This decision has evoked strong resistance from users due to the apprehension that the services may become unaffordable for the poor as well as the middle-class population.

The private parties operating the passenger trains will offer share to the MOR in the gross revenue. That is - private parties will be selected through a two-stage competitive bidding process between interested parties, based on the share offered in the gross revenue of the project. The selected private parties will have the right to determine and collect fares from users using the existing IR passenger reservation system for booking of tickets.

Undoubtedly, private parties would not be interested in providing world-class travel experience to passengers by operating on uneconomic conditions. Therefore, it is likely that the fare may cater to passengers who may be able to afford higher fares. However, it has been proposed that subsequently, the Rail Development Authority would be acting as an independent body to determine the fares with the intention to ensure that pricing is commensurate with the expenses.

Interestingly, in addition to the fare from users, private parties have been provided with the option to earn revenue from the provision of value-added services including food, beverages, linen and infotainment. Additionally, they may generate rental income from the use of commercial or other spaces and advertisements on the trains.

While the objective of allowing private parties to operate passenger trains is to reduce the demand-supply deficit in the sector, it will be interesting to witness the manner in which modern technology rolling stock ensuring reduced transit time would be made accommodated in an affordable fare.

Usage of the the network

The MOR will be providing non-discriminatory access to private train operators to the IR track and signalling network. Further, it is proposed that the MOR will ensure fitness of the network for smooth operations of the trains in accordance with the train operation plan.

The operation of passenger trains by private parties is likely to alter the landscape of the IR network. Effectively, the overarching control of the MoR on rolling stock, railway tracks and manpower engaged in services will diminish.

While the existing trains would continue to operate, the running time of the trains being operated by private parties would be comparable to the fastest train of the IR operating between such stations on that route. It will be interesting to witness the slots allocated to the trains being operated by private parties. There are speculations around the fact that operation of trains by the IR and private parties on the same routes may lead to malpractices and increased corruption.

Preferential treatment

The private parties operating the passenger trains will be responsible for designing, procurement, building, financing and operation and maintenance of private passenger trains. Subject to compliance with the IR standards, the private parties are free to procure trains either with distributed power or through powerheads and from their own choice of source. For introduction of new rolling stock, validation will be done by Accredited Independent Safety Assessor on the IR track. However, the concession agreement is proposed to include provisions relating to mandatory sourcing through domestic production in India over a period of time.

The maintenance of the trains shall be the responsibility of private parties. Operation and maintenance of the trains would be governed by the standards and specifications provided in the concession agreement. The IR will provide space to the private parties in the existing maintenance depots in a proximate area on as is where basis for up-gradation or setting up its maintenance depot and use of the same by the private parties for maintaining the trains. The private parties will be responsible for the manpower, tools and plants as may be required for undertaking the maintenance obligations.

While the existing trains would continue to operate, it is proposed that the running time of the trains being operated by private parties would be comparable to the fastest train of the IR operating between such stations on that route, with a variation of plus or minus 10% (ten percent). Interestingly, it is proposed that no new similar scheduled train will operate on the same route within sixty minutes of the scheduled departure of the trains being operated by the private parties. There are several speculations around the fact that operation of trains by the IR and private parties on the same routes may lead to malpractices and increased corruption.

The time-tabling remain with the responsibility of the MOR to ensure that all the busy (and economically viable) time slots are not taken by private parties. However, it will be interesting to witness the slots allocated to the trains being operated by private parties – firstly, to ensure that the fares remain affordable and secondly, to enable the private parties to meet their costs.

While the MOR has stated that private parties operating the passenger trains would enhance the passengers' services in trains and will help the MOR in increasing earnings, it is imperative to have sufficient checks and balances in place to ensure that private parties are not given any undue advantages.

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