Private train bidders get ‘no compete’ cushion

To make private train operations more attractive for potential bidders, the Railways has said that it will not run a competing train within a 20-km radius from the originating point on the route of a private train, for an hour.

For example: if a private train is originating from New Delhi, then the Railways will not run a train from another nearby railway station — which could either be Nizamuddin or old Delhi railway station — for an hour. Earlier, the Railways had provided a time gap of one hour for not running competing trains, but was silent on the distance criteria.

In another move, the Railways has extended the due date for financial bids by two months to provide more time to bidders for due diligence. The date by which potential bidders interested in running private trains have to submit financial bids is now March 31, instead of January 29. The decision was taken after the pre-bid conference. This is the latest relaxation provided to make private train operations more attractive for bidders. In an earlier relaxation, the Railways had allowed the passenger train operators to carry a limited volume of parcel cargo in the trains.

Shortlisted firms

Companies that have been shortlisted in the technical bids include Cube Highways and Infrastructure, GMR Highways, IRB Infrastructure Developers, Megha Engineering & Infrastructures, Gateway Rail Freight and Gateway Distriparks; Indian Railway Catering and Tourism Corporation; Malempati Power and Techno Infra Developers; and Welspun Enterprise.

“To lower the risk perception of running a private train, the Railways has said that no new similar train will depart from any station within the 20 km radius of originating station or within 60 minutes of scheduled departure of concessionnaire’s train,” an official said.

Also read:Race to run private trains inches closer to financial bid

The Railways has also eased the conditions under which it will start operating a competing train on a route by changing the calculation methodology to arrive at “high utilisation”. The 80 per cent utilisation level of a private train, the condition that allows the Railways to run a train, will be calculated for one year instead of three months from the second year of operations. “Earlier, the Railways had maintained that it will run another train within an hour of a private train if the occupancy of the train touches 80 per cent for three months. Now, that has been amended to 80 per cent of previous three months in the first year of operations on a path; or previous 12 months from second year onwards,” explained an official .

Despite such relaxations, some of the private train operators, who have been shortlisted for financial bidding, have raised concerns regarding lack of clarity on having a regulatory body. “In the last few years, there have been several attempts at having a regulator for railways, but somehow that has not materialised yet,” said an industry executive.

“When the train of a private train operator gets delayed, the operator is expected to pay a penalty. But when the Railways’ own trains run late, do they pay a penalty to passengers,” the executive asked.