India / Private trains will have to share gross revenue with Indian Railways

New Delhi: Just like in airlines, passengers of private trains, once launched, could have to pay for preferred seats, baggage and onboard services, the earnings from which will be part of the gross revenue to be shared with the Railways, according to a document of the national transporter.

The Railways recently floated a Request for Qualification (RFQ) inviting private entities to operate passenger trains on its network.

The decision on whether to charge passengers for these services will rest with the private parties, officials said.

In the document, it has said that bidders based on their financial capacity, will be required to offer share in the gross revenue at the request for proposal (RFP) stage for undertaking the project.

While the Railways has given private players the freedom to fix the fare to be charged from passengers, they will also have the freedom to explore fresh avenues to generate revenue, according to the RFQ.

“The definition of gross revenue, which is under consideration is as below. Any amount accruing to the concessionaire (private entity) from passengers or any third party from the provision of following services to the passengers on account of running of trains under the concession agreement: amount printed on ticket- fare; amount from preferred seat options, baggage/ luggage, cargo/ parcel (if not included in the ticket fare),” the RFQ stated.

“The amount from on board services such as – catering, bed roll, content on demand, wi-fi (if not included in the ticket fare). Any amount accruing to the concessionaire on account of advertising, branding and naming rights pursuant to the concession agreement,” the document stated.

The Railway Board chairman at a press conference had allayed fears that prices of tickets of private trains will be too expensive and said that they will be market driven and based on competitive pricing.

In a first of its kind initiative, the Indian Railways has invited proposals from private companies to run 151 modern passenger trains on 109 pairs of routes across the country in a project that would entail private sector investment of about Rs 30,000 crore.

The private entity shall be free to procure trains and locomotives from a source of its choice, provided such trains and locomotives are compatible with specification and standards specified in the concession agreement.

However, the concession agreement would include provisions relating to mandatory sourcing via domestic production in India over a period of time.

The Railways has also said that the running time taken by a private train from the originating station to the destination station shall be comparable to the fastest train of the railways operating between the same stations.

“The Railways shall provide a non-discriminatory access to the trains operated by the private entities with no new similar scheduled train departing between the same stations within 60 minutes of the scheduled departure of the private train,” the RFQ said.

Each train shall have a minimum of 16 coaches (equal to a length of 384 meter, buffer to buffer) and a maximum not exceeding the longest passenger train operating on the respective route.

The passenger trains to be operated by the private entities shall be designed to operate at a maximum service speed of 160 kmph.