In a turnaround for the Indian Railways (IR), there has been a proposal by the government held mass mover to privately run 150 trains in 100 routes. The government wants to capitalize and generate a higher revenue by providing better services with competitive pricing but lacks the expertise to do. Also, non-operating revenue is the target by the central government to raise it exponentially. There has been quite a bit of under investment and the overhauling would require huge investments. To raise these investments the government is trying to forge alliances by private players to upgrade the legacy rail network by capacity augmentation.
Dedicated freight corridor once operationalized would make way for more privately-run trains to better serve the ever-increasing passenger demand. There has been quite a constraint on the supply side where only 13,000 passenger trains were able to run where there was a minimum demand of 20,000 trains to be run. The capacity augmentation in high density routes where future private trains can be operated are either being doubled, or tripled with further dedicated freight corridors being proposed apart from the Western Dedicated Freight Corridor (WDFC) and Eastern Dedicated Freight Corridor (EDFC).
There has been a high competition from the road and air sector where better customer services are being provided and this is eating the railways share of the revenue. With the rising disposable income and increasing middle class population in India. People are more than willing to spend if better value proposition for the product is offered. This intense competition has also improved and compelled to run private trains in India.
IRCTC in its pilot project running two successful private trains in the last 6 months have motivated the government with stern belief that this could be the way forward to increase revenue from railways instead of operating the passenger segment in net loss where for every 1 rupee earned 95 paisa needs to be spent. This is used to be negative in the past where government used to allocate the tax payers money.
The government has called for private players to run such trains with 20 private players shown interest for the same. These are Bombardier India, Adani Ports, France’s Alstom, Spain’s Talgo, Macquaire group, Tata Realty, NIIF, Hyundai Rotem Company, CAF India, Hitachi India, Thoth Infrastructure, Medha Servo, IRCTC, Siemens, CRRC ZELC (China), BEML, Essel group among others were the other prospect players present at the stakeholders meet.
The government’s think tank Niti Aayog has made an estimate of a revenue of INR 22,500 crore of revenue opportunity through this model itself. The railways would only be the regulator and keep check on the undue pricing of the tickets by the private players. This is the long-term vision of the present government. The private players in the current setup would only be operating the services part as of now with the coaches and other rolling stock being from the railways. This also includes the loco pilot and the guard. In the long run, the governments vision is to privatize the entire train operations just like other developed nations.
This has not come with its own share of controversy and is still debatable within the country with employees and customers using the present setup fear the exorbitant prices being charged going forward. This would pan out to be a nightmare for the people living below poverty line and the lower middle segment which still constitutes towards the majority in India. All in all, the government is doing its part to raise the revenue and provide better services and plans to run around 150 private trains by the next fiscal. The latest addition to this list of private trains is Indore to Varanasi Mahakal express that would be the first overnight train privately run. This is to connect two Jyotirlingas with better services being provided by the IRCTC operated train. The tickets can only be availed online through IRCTC website or app with no TATKAL facility but dynamic pricing. There are more trains proposed on high density tourist routes. The first two private trains by IRCTC in chronological order are Lucknow-New Delhi Tejas express and Ahmedabad-Mumbai Tejas express.
With the second train constantly running at 90% occupancy in every journey in both directions and the first train having 80% occupancy, the government will fast track 150 trains to garner more revenue and exploit the infrastructure at disposal.
