How Indian Railways will benefit from Private Trains
India has a vast railway network that covers 121,407 kilometers. Indian Railways (IR) owns and operates over 65,000 of operating route length. The Indian government has undertaken several measures to upgrade its railway infrastructure. Indian Railways announced that it will spend more than $127 billion upgrading the railways by the end of this year. Also, the government selected 100 routes to operate 150 private trains. Read on to learn how Indian Railways will benefit from private trains.
The Availability of more Trains
India has had a huge demand-supply gap in railway transport for many years. The new deal between Indian Railways and private operators will increase the number of trains that are available for passengers. Also, rail travel will be more competitive than air travel in the country. The aviation industry has attracted many passengers from the 2nd AC class since air tickets of many carriers have a slight difference with 2nd AC tickets.
Private investors will introduce new-design trains in India. They will offer better passenger amenities including on-demand and value-added services. But, Indian Railways regulations prohibit passengers from playing card games inside trains. So, the operators will have to check their passengers.
Increased revenue for Indian Railways (IR)
Indian Railways has incurred huge losses in managing passenger trains over the years. A NITI Aayog report shows that up to 80 percent of the losses are in passenger trains that run in suburban regions. The Railways Corporation incurs losses in each class except the 3rd AC. If the government applies the proposed transport model, Indian Railways will significantly reduce its losses and increase its revenue. It is planning to replace 40,000 coaches including the Linke Hofmann Busch train coaches.
Low Track Maintenance Costs
According to the Indian government’s plan, global and local players who operate in the tourism and railway sectors can bid for 100 routes. But they will share part of the revenue with the government. Indian Railways and the NITI Aayog will invest ₹22,500 crores in the new project. Some of the routes include Mumbai Central-New Delhi, Allahabad-Pune, New Delhi-Patna, Howrah-Chennai, Indore-Okhla, Dadar-Vadodara, Anand Vihar-Bhagalpur, Chennai-Okhla, Howrah-Anand Vihar and Secunderabad-Guwahati.
Indian Railways has split the 100 routes into 12 clusters. It will allow private trains to collect fares and they will have flexible class stops. Besides, the operators will pay haulage charges to Indian Railways. A NITI Aayog memorandum indicated that the privatization plan will introduce modern rolling stocks and technology thus reducing the maintenance costs of the railway lines. It will offer passengers world-class service.
Now, Indian Railways spends more than it earns from managing trains. For instance, the state corporation had an operating ratio of 121 percent against 113 percent in the 2018/2019 financial year. It couldn’t lower passenger fares and the charges increased early this year. Indian Railways owns the signaling system and the rail track in India. So, private operators will have to coordinate their operations with the state corporation.
Private trains will use 100 routes in India’s railway network. The Indian government will allow them to recruit staff, offer essential amenities to passengers and fix fares. But, they will have to coordinate with Indian Railways. The new deal between the government and private investors will lead to the introduction of modern trains.
