Railways gives green signal to parcel cargo in private passenger trains

Indian Railways (IR) has decided to permit up to eight tonnes of parcel cargo in each train run by a private operator. However, Railways has not yielded to the private operators’ request to attach an extra parcel van.

The potential private train operators had asked whether a parcel van could be attached to the private trains in the backdrop of plunging passenger traffic in the post-Covid-19 era, and in the backdrop of predictions regarding a shrinking economy.

IR specified that the point about permitting up to eight tonnes of cargo in a parcel van will be added in the contract document to be signed by both parties to permit private operators to garner some revenue from courier companies looking to use the environment-friendly and possibly cheaper rail mode.

As private train operators are free to design the seating or berth interior for trains, they have the freedom to design the tariff for their cargo customers for parcels and courier services, softening the impact in the process.

Meanwhile, IR has stuck with its decision to sell the rights to run private trains on a bunch of its most profitable routes by March-end at this juncture. It has accommodated the request of potential bidders to shift the date for submitting qualifying bids to a limited extent by shifting the due date by one month to October 7. This is lower than the three months extension, which the bidders had asked for.

The national transporter has compressed the time schedule for remaining activities that lead to issuing of financial bids and awarding the projects. The financial bids for the project will be invited by December and awarded by March 31, 2021.

On having a regulatory body for private train operations, IR has shown its inclination towards having an “independent engineer”, although nothing prevents the government from forming a separate regulator or assigning responsibility to an existing regulator later.

High charges

Some potential operators pointed out that haulage charges — the amount that they have to pay to IR — are too high, making the project financially unviable, and asked for a drop in haulage charges. But, Railways has not dropped the haulage charges.

Private train operators are free to run smaller train-length with capacities lower than expected, but they have to pay the specified haulage charges, said the Indian Railways.

Expecting risks in demand for travel, private train operators asked if Railways could provide a minimum guarantee of 80 per cent to passenger filled trains to ensure financial viability. At this stage, IR has refused to give any such guarantee. The national transporter has reserved its right to introduce extra trains between two destinations if a private operator sees over 80 per cent capacity for three months.

Firms that have bought the qualifying documents include GMR Infrastructure, CAF India Pvt Limited, IRCTC, BHEL, Alstom Transport, Bombardier Transportation and Siemens.

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