The Ministry of Railways organised pre-application conference on its private train project on Tuesday. The conference attracted the participation of 16 prospective applicants.
The Ministry of Railways had invited 12 requests for qualifications (RFQs) for private participation in the operation of passenger train services to over 109 origin-destination route pairs through the introduction of 151 modern trains or rakes, which shall be in addition to the existing trains operated on the network.
This is the first initiative of private investment for running passenger trains on the network of Asia’s second-largest rail transporter. The project would entail a private sector investment of about Rs 300 billion.
According to a statement released by the Ministry of Railways, the initiative seeks to improve the availability of transportation services and introduce modern technology rolling stock and services that would improve the overall travel experience of passengers. Participation of multiple operators in train operations will help create competition and improve service delivery.
The initiative is also intended at reducing demand-supply deficit in the passenger transportation sector.
The private entities for undertaking the projected will be selected through a two-stage competitive bidding process comprising of RFQ and Request for Proposal (RFP).
It was as part of the bidding process that the ministry conducted the first pre-application conference. The issues and concerns raised by the prospective applicants were deliberated and clarifications offered by representatives of the railway ministry and the government think-tank NITI Aayog on the RFQ provisions as well as the bidding framework.
Most queries were mainly related to the eligibility criteria, the bidding process, procurement of rakes, operations of trains and composition of clusters.
There were also queries on haulage charges on which the ministry has clarified that haulage charges would be specified upfront and suitably indexed for the entire concession period.
The ministry will also be providing the details of passenger traffic being handled on the routes under biding. This is expected to facilitate bidders to undertake the necessary due diligence before the commencement of the bidding process.
The ministry has clarified that trains to be operated under the project can be either purchased or taken on lease by private entities. It has also clarified that risks concerning the operation of trains shall be allocated to the parties in an equitable manner.
The ministry will be providing written replies to the queries received from the prospective Applicants by July 31. The second pre-application conference is scheduled for August 12.
In its April-June 2020 issue, INFRASTRUCTURE TODAY had examined that though Railways’ move to rope in private operators was drawing interest, there are enough obstacles that need to be cleared. However, that can happen only when the government simplifies the way it works.