The Ministry of Railways yesterday announced the invitation of RFQ (Request for Qualification) applications from private entities who may be interested in operating private passenger train services.
The statement by the Ministry of Railways calls for “private participation for operation of passenger train services over 109 Origin Destination(OD) pairs of routes through introduction of 151 modern Trains (Rakes).“
However, the statement has been misunderstood by many on social media.
Claim: 109 routes are being privatized
Fact: No, train routes are not being privatized
Private entities will only be allowed to run some services (see list of proposed trains here) on Indian Railways tracks, using Indian Railways stations, on specified routes, in already defined slots.
Existing Indian Railways services will continue to operate on these routes as before.
This is similar to private airlines operating their own aircraft, managing their own ticket bookings, services and paying the government for use of common infrastructure like airspace and airports.
Private operators will pay Indian Railways for use of railway tracks and other infrastructure. but may use their own trains, maintenance facilities and staff.
Excerpt from the Ministry’s statement: “The Private Entity shall pay to Indian Railways fixed haulage charges, energy charges as per actual consumption and a share in Gross Revenue determined through a transparent bidding process.”
Claim: Private entities will fix fares for 35 years
Fact: No. Private Operators won’t fix fares for IR trains
Private operators will only be allowed to decide fares for trains that they operate on the route. They will have no authority on fares of trains that they do not operate, including trains being run by Indian Railways currently.
Private train operators have been offered a concession of 35 years so that they can recoup their investment in their trains, maintenance facilities and other infrastructure.
Claim: Indian Railways is being privatized
Fact: No, IR has not made any such move
Official statements and ongoing projects point to a consistent effort by Indian Railways to monetize existing resources and improving operational efficiencies.
Privatization will mean sale of Indian Railways operations and infrastructure to outside entities. However, there is no sign of any movement in that direction yet.
Redevelopment of stations and leasing out of railway land to commercial use is not sale of assets or privatization. It is an attempt by the organisation to further improve revenues in order to meet a widening gap between earnings and expenses thanks to a large increase in wage bill for its 12.5 lakh employees.