Just like in the airlines, passengers on private trains, once launched, may have to pay for preferential seats, baggage and onboard services, the revenue from which will be part of the gross revenue to be shared with the railways, according to a document from the national carrier.
The railways recently launched a Request for Qualifications (RFQ) inviting private entities to operate passenger trains on its network.
Whether or not to charge passengers for these services will be up to private parties to decide, officials said.
In the document, it is stated that the bidders, depending on their financial capability, will be required to offer a share of the gross revenue at the Request for Proposals (RFP) stage to undertake the project.
While the railways have given private players the freedom to set the fare to be charged to passengers, they will also have the freedom to explore new avenues to generate revenue, according to the RFQ.
The definition of gross income, which is under consideration, is as follows. Any amount due to the concessionaire (private entity) from passengers or any third party from the provision of the following services to passengers for running trains under the concession contract: amount printed on the fare ticket; amount of preferred seat options, baggage/baggage, freight/parcel (if not included in the ticket price), the quoted price request.
The amount of on-board services such as catering, bedding, on-demand content, wi-fi (if not included in the ticket price). Any amount accruing to the dealer for publicity, trademark and naming rights under the dealer agreement, the document states.
At a press conference, the Chairman of the Board of Railways allayed fears that private train ticket prices were too expensive and said they will be market driven and based on competitive pricing.
In a first-of-its-kind initiative, Indian Railways has solicited proposals from private companies to operate 151 modern passenger trains on 109 route pairs across the country in a project that would involve investment from the private sector of around Rs 30,000 crore.
The private entity is free to obtain trains and locomotives from a source of its choice, provided that these trains and locomotives are compatible with the specifications and standards specified in the concession contract.
However, the concession agreement would include provisions for mandatory sourcing through domestic production in India for a period of time.
The railways have also stated that the travel time taken by a private train from the originating station to the destination station should be comparable to the fastest railway train traveling between the same stations.
Railways must provide non-discriminatory access to trains operated by private entities with no new similar scheduled trains departing between the same stations within 60 minutes of the private train’s scheduled departure, the RFQ said.
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Each train must have a minimum of 16 cars (equal to a length of 384 meters, buffer to buffer) and a maximum not exceeding the longest passenger train running on the respective route.
The passenger trains to be operated by the private entities will be designed to run at a maximum service speed of 160 km/h.