Railways to rework bidding process for private passenger trains: Sources

New Delhi: The railways will reevaluate and rework the bidding process for the Rs 30,000 crore private passenger trains as the ongoing bidding has failed to receive any interest from private players, sources said on Wednesday. Railways had floated tenders last year for the operation of such trains in 12 clusters. Of the 12 clusters put up for bidding, only three saw any bid at all. Sources said that the absence of a regulator, payment of haulage charges in addition to sharing revenue, and curbs on route flexibility are among the likely reasons that kept bidders away from the railways' ambitious plan of running private passenger trains.

"The entire process of inviting tenders for the private passenger train operations is being re-evaluated. The present process bids may or may not be scrapped after the review is complete," an official said.

In July 2020 the Ministry of Railways had rolled out bids for private participation in passenger train operations in twelve clusters across the country. The plan included 109 origin-destination pairs. Winning bidders were to be provided a concession period of 35 years on a revenue basis model.

During the Request for Qualification (RFQ) last year, 16 private sector firms showed interest in the project. GMR Highways Ltd, Indian Railway Catering and Tourism Corporation Ltd (IRCTC), IRB Infrastructure Developers Ltd, Cube Highways and Infrastructure III Pte. Ltd and CAF India Private Ltd were some of the major firms that evinced interest in the project.

This number significantly reduced in the recently held RFP stage (financial bidding) with only two bidders coming forward. The bids were submitted by IRCTC and Megha Engineering and Infrastructure Ltd for three clusters, while all other bidders backed out, citing concession rules favouring the Indian Railways, sources said.

The Indian Railways in July last year planned to introduce private trains on its network in phases, with the first dozen due to start running in the 2023-24 financial year and all 151 by 2027. According to the Railway Ministry's projections, the transporter was supposed to select the companies that will run the private trains by April 2021; the first 12 were expected to start plying 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.

Now, the sources said that the ministry has gone back to the drawing board to plan the modalities of the entire scheme from scratch.

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