»
Private trains in Indian Railways - First time in its 166 year history -
»
First Private
Train is Tejas Express - Between New Delhi and Lucknow - From 5th October, 2019 - by Private player i.e., IRCTC - Indian Railways Catering & Tourism
Corporation, a Public limited company of Indian Railways (recently made in
Stock market debut/entry)
Swanky / high class features (aircraft - like frills) of
Tejas Express - 1st Private train
ü On-board
entertainment
ü Meals
with local flavour / taste
ü RO
water purifiers in every coach
ü Tea & Coffee vending machines
ü Aircraft
style trolleys to serve passengers
ü Home
to destination luggage pickup and drop facility.
ü Free
travel insurance with Rs. 25 lakh coverage
ü Call
buttons to request crew service
ü Automatic
doors
»
However the above frills will come at a
premium. For example, fare between New
Delhi and Lucknow costs Rs. 880 in Shatabdi Express (Indian Railways), the same
is at Rs. 1125/- for Tejas Express (IRCTC) for Chair car.
»
Onboard the Tejas Express - Ticket examiners
& Service crew by IRCTC and Loco pilots and Guard by Indian Railways.
»
IRCTC willl pay haulage charges and lease
charges to Indian Railways.
»
Advertisements
- Inside and outside of Tejas Express train coaches - Revenue goes to
IRCTC
Let us check highlights of Draft Documents for discussion on Private
Participation in 150 Passenger Trains by NITI Aayog :-
Click for NITI Aayog Report
ü
100 routes
ü
10 to 12 clusters / groups
ü
Private investment of Rs. 22,500 Crores
ü Concession Period - 35 years.
ü
Right to collect Market linked fares i.e., based
on Demand.
ü
Flexibility for Class composition i.e.,
composition of AC and Sleeper coaches.
ü
Flexibility for number of halts.
ü
Procurement of Technology Agnostic rakes (train
sets) from the source they wish. But
subject to compliance with output based standards & specifications.
ü
Two-stage Bidding Process – RFQ - Request For
Quotation & RFP - Request For Proposal
ü
Bidding on cluster basis – Each cluster a
project (entailing around 12 rakes)
ü
Bid Parameter: Gross Revenue Share. Selection of
Successful Bidder based on highest revenue share;
ü
Each bidder eligible for award of maximum 3
clusters
ü
Access to track and signaling network on payment
of Fixed pre specified haulage charges including terminal, traction,
transportation, track maintenance, signaling costs, and overheads Annexure
ü
Compliance with pre-approved Train Operations
Plan
ü
Access to Depot Site & Washing Line
ü
Use of concierge services
ü
Implement a transparent and non-discriminatory
system for dispatch and movement of Trains
ü
Procurement of entire rake (minimum 16 coaches
a Train) - on Concessionaire (that is
private player)
ü
Scheduled maintenance for first pit examination
not before 31 days of the previous scheduled maintenance or a travel of ~40000
kms
ü
No examination of train before a travel of ~7000
kms*
ü
Trains to be prototype tested and ready for
Operations as per Project Schedule.
ü
COD (Commercial Operation Date) - Deployment of
first train on track
ü
Deployment of 100% Trains within 5 years
ü
Operations to start within 3 years from
Appointed Date
Why Private
Trains ?
ü Introduce
Modern technology Rolling Stock with reduced maintenance (POH)
ü Reducing
journey time
ü World
class service with improved user experience
ü Capacity
constraints lead to loss of passenger business to other modes i.e., Air
traffic.
ü Huge
unmet demand. Reduced Supply Demand deficit. In
2017-18, Waitlisted passengers are 8.85 Crores which is approximately 15 % of
Total Reserved passengers 65 Crores.
ü 5% Railway
reserved segment in CAGR (Compounded Annual Growth Rate) vis-a’-vis 13% air
traffic growth (2013-18)
ü
Flexibility to procure rolling stock from source
of choice, subject to compatibility with IR standards.
ü
Third-party certification by Accredited
Independent Safety Assessor (ISA)
ü
Applicable till such time as RDSO adopts testing
norms defined in UIC 518 or any other internationally accepted standards.
ü
Safety certification by IR before each trip
based on travel worthiness certified by the Concessionaire
ü
Complete maintenance of Trains by Concessionaire
ü
Procure & install requisite machinery
/plants for maintenance
Key Performance Indicators : -
1. Punctuality – Delay of not more than 15 mins in departure/
arrival
2.
Reliability – Reduction in Guaranteed
Reliability - Mean distance travelled between two Failures
3.
Upkeep of the Trains: Hygiene, Security etc
4.
Monthly Report on KPI (Key Performance
Indicators) Compliance for each Train
5.
Damages for
non-compliance of KPI – Calculated at a % of Haulage Charges
6. For delay due to Authority i.e., Indian Railways - damages
payable by Authority
Financials:
- Concessionaire Revenue: User Fare -
Demand, collect and appropriate Market Linked fare from users of Trains. Charges/fee
for other related services
- Concessionaire Payment: Concession Fee:
Gross Revenue Share (% provided in the bid). Haulage Charges - from the
date of commencement of operations; indexed (WPI - Wholesale Price Index)
every 2 years per a pre-specified formula.
- Termination
Payment basis the Adjusted Depreciated Value of rakes on Concessionaire /
Authority Default
Eligibility
Criteria:
- Eligible
applicant may be a - domestic or international entity – government/private
company, fund etc
- Technical Capacity: Minimum sum of Rs 2700 crore over
last 5 years. Against payments for development or construction of Eligible
Projects OR revenue received from Eligible Projects
- Financial
Capacity : Minimum Net Worth - Rs 450 crore
Accidents:
1.
Relief
& Restoration by Railways
2.
Compensation for claims in respect of loss of
life, bodily injury, luggage and goods etc. to be covered under Insurance taken
by the Concessionaire
Bidding Timeline - Private Trains
Invitation
of applications under RFQ - Request For Quotation
|
Short
listing based on Technical and Financial criteria
|
Invitation
of bids from shortlisted applicants under RFQ
|
Selection
of successful bidders for each cluster
|
Award
of Project
|
January
2020 =T
|
T +
60 days
|
T +
70 days
|
T +
150 days
|
T +
180 days
|
Haulage charges (for 16 Coach Train):
Description
|
Haulage charge (Rs. TKM -
Track Kilo Meter)
|
Terminal Cost
|
152
|
Traction (includes Energy)
|
158
|
Transportation
|
123
|
Track Maintenance
|
74
|
Signalling
|
27
|
Overheads
|
134
|
Total
|
668
|
Who mooted the proposal of Private Trains
»
In November, 2018, Niti Ayog released the
document, ‘Strategy for New India @ 75’, and set goals for the year 2022-23
(75th anniversary of India's independence) and identified a diverse range of 41
areas that recognize the progress already made; and challenges that remain;
identify binding constraints in specific sectors; and suggest the way forward
for achieving the stated objectives.
Observations of Niti Ayog
ü Railways
share in surface transport is very low i.e., 33 percent in 2015 year ( 86 % in
1950 year ) due to shortfall in carrying capacity and lack of price
competitiveness.
ü The
expenditure on the railways as a percentage of transport expenditure declined
from 56 per cent in 1985-90 (7th plan) to 30 per cent in 2007- 12
ü IR’s
golden quadrilateral and its diagonals make up only 15 per cent of the total
route of the railways but it transports 52 per cent of passenger traffic and 58
per cent of total freight load. This highlights the high saturation and
over-utilized capacity on popular routes. Since passenger and freight traffic
move on the same tracks in India, we have not been able to increase speed or
capacity in a significant manner relative to global benchmarks.
ü From
1950-51 to 2013-14, the route km increased by only 23 per cent against the
growth in freight and passenger km of 1,344 per cent and 1,642 per cent
respectively. This highlights the over burden on line capacity and saturation.
The following table signifies saturation of the route track.
|
Route KMs
|
Passenger KMs
|
1950
|
53596
|
66517
|
2013
|
65806
|
1158742
|
Increase %
|
23 %
|
1642 %
|
Targets by 2022-23 i.e., 75th anniversary of India's
independence
ü Achieve
100 % electrification of Broad Gauge track from 40 % level in 2016-17
ü Increase
the average speed of freight trains from 24 kms/hour to 50 kms/hour
ü Increase
the average speed of passenger trains from 60 kms/hour to 80 kms/hour.
ü Creation
of new lines from present 7kms/day to 19 km/day. That is nearly 7000 kms new lines per year.
ü Increase
the share of non-fare revenues in total revenue to 20 per cent.
ü Safety
- Achieving Zero fatalities from 2016-17 level of 238 fatalities.
ü Punctuality
of trains - 95%
ü Share
of Freight movement from current level 33 percent to 40 percent.
ü Freight
load of 1.9 Billion tonnes (from 1.1 Billion tonnes in 2017-18)
ü Separate
suburban passenger transport from the rest of the network and put a light rail
network in place in all major urban areas under local governments.
ü Complete
the commissioning of the remaining 55 of the 100 new freight terminals
announced in the Rail Budget of 2016-17 under ‘Mission Hundred’
ü Opening
up the ownership and operations of freight terminals to the Private sector
ü Opening
up the ownership of locomotives and rolling stock to the private sector under a
transparent, neutral (nonrailway) and fair regulatory mechanism.
ü Rationalize
fare structures and subsidies, and monetize assets to generate revenues:
ü Monetize
land resources with the railways, particularly through developing non-railway
revenues such as through retail or other activities.
*****
Concept
by Frederick W. Taylor
( 1856 – 1915) – An American Mechanical Engineer and one of the
first Management Consultants. 
