Indian Railways' private train project gets positive response, 16 companies take part in first pre-bid meeting

The first pre-bid meeting for the Indian Railways' private player-operated trains project was conducted yesterday (i.e. July 21, Tuesday) with a positively strong response. As many as 16 companies, ranging from three PSUs of the central government to an Australian firm, had attended the meeting and showed keen interest in the Indian Railways' private train project.

According to sources, some of the notable companies which attended the first pre-bid meeting are:

• IRCTC
• BHEL
• RITES
• Bharat Forge
• Bombardier
• GMR Group
• GatewayRail
• Vedanta
• Medha
• CAF (Australian firm)

However, sources confirmed that Tata and Adani, two Indian giants who were eyeing the project, were not involved in the first pre-bid meeting. Since Tata and Adani groups held meeting with railway officials ahead of the bidding process, it was being believed that these two giants would also be involved in the pre-bid meeting.

There were also discussions about Spicejet, IndiGo, and MakeMyTrip being involved with the bidding process, but these companies, too, were not involved with the first notch of the bidding process.

The next pre-bid meeting of the Indian Railways' private player-operated train project is scheduled to be held on August 7.

The project is the most unique step of the Indian Railways so far, aimed at inviting private players to run passenger trains on 109 important routes of the Indian Railways. The Union Ministry of Railways has said that the mega project aims to bring new technologies, boost revenues, and increase job opportunities.

151 new trains, operated by private players, will run in addition to the trains which have already been functioning.

Private entities for undertaking the project will be selected through a two-stage competitive bidding process comprising of Request for Quotation (RFQ) and Request for Proposal (RFP).

Centre had earlier initiated the RFQ process for the purpose of receiving questions or queries from the private players that are to invest in this project. The last date for this RFQ process was July 16.

The queries were mainly related to eligibility criteria, bidding process, procurement of rakes, operations of trains and composition of clusters.

There were a few queries on the haulage charges to which the Railway Ministry replied by stating that haulage charges will be specified upfront and will be suitably indexed for the entire concession period thereby bringing certainty in the haulage charges.

The ministry will also be providing the details of passenger traffic being handled on the routes under the bidding process. This will enable bidders to undertake their due diligence in the project.

Railways has clarified that trains that will be operated under the project can be either purchased or taken on lease by the private entities. It was clarified that risks with regard to the operation of trains shall be allocated to the parties in an equitable manner.

All the received questions or queries will be answered by July 31, the ministry had said earlier.

After the second pre-bid meeting, the Ministry of Railways will send answers to all the questions by August 21.

Most importantly, the central government is looking to invite applications from private players to invest in the project on September 8.

As per the plan fixed by the Union Ministry of Railways, after the applications are sent by the private players for investing in the railway's project, a shortlist of applicants will be prepared within 60 days. Following this, the bidding process will then be carried forward.

Railways aims to complete the bidding process and get the first private player-operated train running on the tracks by March 2023.

The Union Minister of Railways, Piyush Goyal, has made it clear that the private player-run train project is not knock-on privatization in Indian Railways. The government has been consistently claiming that the biggest benefit from the arrival of a private player will be incurred by the rail passengers.

Multiple operators will create competition and improve service delivery. This initiative is also intended at reducing the demand-supply deficit in the passenger transportation sector.