From Tatas to Adani, private players train sights on railway privatisation

Railways holds meet with prospective bidders prior to RFQ

The Indian Railways’ move to rope in private players to operate 151 trains has drawn interest from top companies, including Tatas, Adani Group, Alstom, and Miami-based Norwegian Cruise Line, the world’s third-largest cruise line in terms of the number of passengers. 

Industry sources and manufacturers in the sector indicated they got inquiries from the country’s largest airliner, IndiGo, and online travel major MakeMyTrip regarding the possibilities of running a private train in the country. However, IndiGo termed it “speculation” and MakeMyTrip indicated the company was “not considering this at the moment”. 

The national transporter came up with a request for qualification (RFQ), inviting private players for running 151 trains on 109 routes across the country. The RFQ stage is expected to be over by September and bids are expected to be invited in February and finalised by April next year.

“A lot of companies, like Tatas, Adani, Norwegian Cruise Line, IndiGo, MakeMyTrip, and Bharat Forge, have evinced interest and inquired about procuring trains and coaches,” said an industry source close to the development. Tata and Norwegian Cruise Line did not respond to questions from Business Standard. 

 

Among other players likely to be in the race include Delhi-based RK Associates & Hoteliers, a contractor of Indian Railway Catering and Tourism Corporation, for the Tejas Express, India’s first corporate train launched in October 2019. 

On its website, the company says it is “capable of handling private trains”.

These private trains are supposed to run at 160 kilometres per hour, which is the maximum speed. 

“With private players coming in, procuring coaches will be easier and faster and the process will create jobs too as it will be a Make-In-India approach. Each factory can generate around 40,000 direct and indirect jobs. In 2016, we had a trial run and it was proven that our train can clock a very high speed on Indian tracks,” said Subrat Nath, managing director (MD) of Spanish manufacturer Talgo’s India arm.

 

 

According to the Indian Railways, the move will help to meet the increased demand and the passenger waiting list will be shorter. 

According to statistics, the Indian Railways handled 8.4 billion passengers in 2019, while it could not provide reservation to around 50 million.

The Indian Railways had organised a pre-RFQ stage meeting of interested players before the lockdown. “Many countries, including Japan, Germany, the US, and Canada have managed railroad privatisation. The first move of privatising 151 trains will add to this effort by bringing a world-class travel experience to Indian passengers. While the tendering for this project is at initial stages, Alstom will be interested in exploring this opportunity,” said Alain Spohr, MD, India & South Asia, Alstom. 

Alstom offers equipment and services, from high-speed trains, Metros, trams, and e-buses to integrated systems, infrastructure, signalling, and digital mobility solutions. 

“The idea of private trains needs huge investment, with each train requiring around Rs 200 crore. It is an opportunity for private players. The licence will be for 35 years and will also improve the passenger experience. We are the largest in terms of ticket bookings, at 20,000 tickets a day. We want to provide a unified solution for both government and private players coming into this business of running trains, mostly like an online travel aggregator,” said Dinesh Kumar Kotha, co-founder and chief executive officer at Confirmtkt, a Bengaluru-based online train ticket discovery and booking engine. 

The meeting was attended by 26 players, including corporate majors and funds like Adani Ports and Special Economic Zone, Bharat Forge, Essel Group, Mitsui & Co., GatewayRail Freight, KEC International, RK Associates & Hoteliers, Thoth Infrastructure, National Investment and Infrastructure Fund, CAF India, I Squared Capital, Equis Funds Group, Macquarie Group, GATX Corporation, Brindavan Food Products, and Confirmtkt. 

In addition, manufacturers and service providers like Bombardier Transportation, Alstom Transport, Siemens, Hyundai Rotem, Talgo, Hitachi India and South Asia, Medha Servo Drives, CRRC Zelc, and BEML, too, had participated in the meeting.