Tata Group among companies interested in running 150 private trains
The Tata Group is among the companies that have indicated an interest in running private trains, Railway Board Chairperson Vinod Kumar Yadav said Saturday. In her Budget speech on Saturday, Finance Minister Nirmala Sitharaman had mentioned that 150 passenger trains would be operated through public-private partnerships (PPP). The move is directed at ending that Indian Railways' monopoly in the sector. Here are more details.
According to Economic Times, about 20 infrastructure and transportation companies, including Tata Group, Adani Ports, Alstom Transport, Macquarie group, Bombardier, etc., have expressed interest in operating 150 private passenger trains on 100 traffic-heavy routes in India. Reportedly, bids for the 150 private trains will be placed in the next two-three months and contracts are likely to be signed in the next fiscal.
However, Yadav said that until the modalities of the high-priority project are worked out, the Indian Railway Catering and Tourism Corporation (IRCTC) will continue to operate the trains. Recently, the IRCTC has started running private trains on two routes: Delhi-Lucknow and Ahmedabad-Mumbai. The Railway Board Chairperson also said that a third private train would soon run between Indore and Varanasi.
Earlier this month, NITI Aayog estimated investment of Rs. 22,500 crore for the privatization of 150 trains on 100 routes. To lower the railways' expenses, Sitharaman also proposed a solar project in her Budget speech. The railways hope to become self-sufficient in solar power by 2030. Yadav later elucidated that 51,000 hectares along railway tracks will be used to establish solar/wind power systems.
Notably, the Indian Railways is saddled by huge operational costs, which eat up its profit margin. The Operating Ratio (OR) for 2019-20 has been pegged at 97.4%—for every Rs. 100 the railways earned, it spent Rs. 97.4. A 97.4% OR is considerably worse than the 95% predicted in the Budget Estimate for the current fiscal. For 2020-21, the OR is estimated at 96.2%.
The railways' overall capital expenditure is also pegged at Rs. 1.61 lakh crore, which is marginally higher than the previous year's capital expenditure of Rs. 1.56 lakh crore. The railways also got budgetary support of Rs. 70,250 crore against the previous year's Rs. 68,104 crore.
