It aims to attract $7.5 bn investment in next five years
The Central Government will allow private companies to set passenger fares once they start operating train services in the country, a move aimed at luring investors.
“Private players have been given the freedom to fix fares in their own way,” said VK Yadav, chairman of Railway Board. But, “air-conditioned buses and planes also operate on those routes, and they have to keep that in mind before fixing fares.
The move is considered to attract investors. As per reports, the decision to allow private players in Indian Railways will attract an investment of around $7.5 billion in the next five years. Various companies like Alstom SA, Bombardier Inc, GMR Infrastructure Ltd and Adani Enterprises Ltd have reportedly expressed their interest in such projects.
The Indian Railways will also start levying ‘’user fees’’ as part of train fares for the stations that have been redeveloped and those with high footfall in order to generate revenue to provide better facilities for passengers.
Once it comes into effect, it will be for the first time that such charges are levied on rail passengers.
“The charges will be nominal and will be applicable in about 10-15 per cent of the 7,000 railway stations across the country. We are going to keep a very small amount for the user charge. We will issue a notification for the user charge for all stations including both those that are getting redeveloped and those that are not,” the chairman had said.
Indian Railways had in July formally kick-started its plans to allow private entities to operate passenger trains on its network by inviting requests for qualifications (RFQ) for participation on 109 pairs of routes through 151 modern trains, the national transporter said.
The Railway Board had also formed an empowered group of secretaries in October last year that was headed by Niti Aayog CEO Amitabh Kant, to chalk out the modalities of the bidding process and take other decisions to fast-track awarding of bids to private players.
