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Tags Current Affairs

Private train models in India

Date: 01 August 2020 Tags: Railways

Issue

To upgrade the country’s railway system, the government has laid the roadmap for long-term partnerships with the private sector.

 

Background

The government envisages around Rs 50 lakh crore of investment in rail projects up to 2030, but only a part of it can be financed through government coffers, and public-private partnerships are needed for faster development. The decision to allow private players to run passenger trains stems from that policy.

 

Details

  • It is estimated that almost 70 percent of freight trains, which jostle for space with passenger trains on the overcrowded Indian Railway network, will shift to the two upcoming Dedicated Freight Corridors from December 2021. This will free up a lot of capacity to introduce more passenger trains with better services and higher speeds.

  • In the normal course, demand for train seats is much more than available, on all busy routes. The result – waiting lists, overcrowded trains, and even losing business to other modes like air and road.

  • Introducing new, modern trains requires heavy investment in rolling stock like coaches and engines. And then there is the cost of operations, which includes electricity, manpower and all other paraphernalia.

  • Running of passenger trains is a loss-making business for Indian Railways. It recovers only around 57 percent of the cost through tickets on an average. The rest is cross-subsidized through earnings from its freight operations.

  • In this context, to cut its losses and convert that opportunity into a money-making enterprise, the government has decided that some of the trains to be introduced in the future will be run by private companies, in a business model never tried in India before.

  • The idea is to give passengers an option of superior train services without the Railways having to spend any money for it.

  • The government has identified 109 busy routes across India to run 151 private trains for 35 years. These are routes with huge waiting lists and offer the potential to earn. The 151 trains represent only around 5 percent of total trains run in India.

  • The trains have to be technologically superior to what Indian Railways has. They have to run at a maximum speed of 160 kmph. They can be either trainset (like the Vande Bharat) or hauled by locomotives.

  • They have to satisfy all safety preconditions on the Indian network. They have to be certified by bona fide certifying agencies. Each train will have a minimum of 16 coaches and the maximum length of trains permitted on any route. They will undergo trials in India before commercial rollout.

  • The private operator is supposed to share revenues with Railways. The qualifying company that agrees to share the maximum percentage of the yearly revenue with Railways will win the bid.

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