Privatisation of Indian Railways

Indian railways has the 4th largest railway network in the world. And the maintenance of such a big network is solely on the Railways. To lessen this burden, empowered group of secretaries headed by NITI  Aayog CEO Amitabh Kant have planned the privatisation of the railways. Railways currently recovers only 57% of its cost through passenger tickets. Some of its income is through freight. At the same time it has many expenses such as salaries of the employees, maintaining trains etc. Under privatisation, there will be an investment of around 30,000 crore and many expenditures will be borne by private players.

It is to be noted that now our Railways have the same corridor for both freight and passenger trains, which is expected to get separated when the privatisation happens. If such a thing happens it is expected that the problem of punctuality of trains will improve and the passengers will get better service. The government has identified 109 busy routes which will get 151 private trains, but this is only 5% of the total trains that run in India. This means that 95% of the control remains with Railways.

The privatisation will be done in 12 clusters, namely Patna, Jaipur, Bengaluru, Secunderabad, Howrah, Prayagraj, Chandigarh, Chennai and two clusters each in Delhi and Mumbai. The private firms will be placing bids on those particular clusters which they want to take up. The first round of bidding has ended and the second one will end by this financial year and the first set of 12 trains is estimated to be on tracks by the year 2022-23. Thereafter 45 trains in 2023-24, 50 in 2025-26 and 44 in 2026-27, which in total will be 151 private trains. Any private company, Indian or foreign are allowed to place their bids. But there are some conditions as well. The company should have a minimum net worth of ₹1,165 crore in its last financial year. This amount is different according to different clusters and can go up to ₹1,600 crore. The companies have to follow government rules and regulations. The trains should have a maximum speed of 160 km per hour and also minimum of 16 coaches. Of course the company which will give the Railways the maximum revenue who will win the bid but there is also a performance indicator which is punctuality which has the highest number of points to ascertain the performance. The Railways on its part will provide land to this private companies to work on. This is the same land which Railways have.

It is obvious that the tickets of these trains will be higher than we have now. Some people fear that this may cause segregation among the middle class or poor people and the upper class since these trains may not be affordable to all. But our Railway Minister Mr. Piyush Goyal has clarified that Railway will have sufficient control and also the recruitments will happen under the Railway Ministry only. The privatisation is happening to just a fraction of total capacity of the Railways. According to him it is more like a Public-Private Partnership. He assured that Indian Railways will not be fully privatised.

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