Railways likely to scrap tender for private train operation
In July 2020 the railway ministry had invited private players to operate 109 pairs of trains.
The Indian Railways is likely to cancel the first round of bids for operations of passenger trains by private parties after a poor response, according to a report. The ministry of railways is re-evaluating the operations in terms of viability after it managed to receive just two bids for its ambitious program, according to a report in the Business Standard.
The report however also quoted a spokesperson of the ministry of railways, who said that the assessment of the bids is still on and as of yet, the process has not been stalled.
Last July, the ministry, then under Piyush Goyal, had invited Request for Qualifications (RFQ) from private players to operate passenger train services. The ambitious plan included over 109 origin-destination pairs and the introduction of 151 modern trains. This was the first time such a grand initiative was undertaken in the Indian Railways and the total investment of the project was pegged at around Rs 30,000 crore.
The long list of participants
In October 2020, the ministry of railways announced that 120 bids had been put forth by 15 firms for the 12 clusters. Following this, 102 applications were deemed to be eligible in November to participate in the next round, Request for Proposal (RFP). The Ministry was mulling to wrap up the process of awarding all clusters by February this year. Some of the top participants in the bidding process were Indian Railway Catering and Tourism Corporation (IRCTC), IRB Infrastructure Developers, Gateway Rail Freight, Sainath Sales and Services, GMR Highways, Welspun Enterprises, Megha Engineering and Infrastructures (MEIL), Infrastructure III and Cube Highways.
Other key qualifiers included BHEL, Arvind Aviation, Malempati Power, RK Associates and Hoteliers, Construcciones y Auxiliar de Ferrocarriles, PNC Infratech and L&T Infrastructure Development Projects.
A tiny list of actual bidders
Things however took an unpleasant turn when the actual bids were opened last month. Only two firms- IRCTC and MEIL had put forth bids for the clusters and it reflected poorly on the possibility of running the trains. In addition to that, IRCTC was also looking for a partner to foot the bill of recurring expenses of running trains privately.
The discussions of scrapping these bids and coming out with a fresh tender for the participation of private players have gathered steam over the past week. In order to attract bidders, the new bids will relax the revenue sharing obligations and even waive off certain fixed charges.