Privatizing how?
Indian Railways, the world's fourth-largest network, is seeking investments from private firms to operate passenger trains for the first time, I think it's an initiative that could potentially revamp a notoriously inefficient system. Indian Government plans to run private trains over Indian Railway network by April,2023.
Indian Railways has invited proposals from private companies to run 151 Modern Passenger Trains each with 16 coaches. These trains will be high speed trains designed for a maximum speed of 160 kmph. The running time shall be similar to Rajdhani. The Railways will shortlist the bidders and the entire process may require 6 months.
It is estimated that investment around 30,000 crore rupees is attracted. The first bidding process is on the cards and about 20 companies have expressed interest in Infrastructure and Transportation Business. Believe it or not, big players from airline industry like Indigo, Vistara, SpiceJet are planning to expand their territory and would jump right on this opportunity. The contenders to look out for would be Tata Reality and Infra, Adani Ports and Logistics, Essel group, Bombardier(Canadian) and Alstom(French).Let's see if the GOI prefers Made-In-India or a cheaper choice.
But why to privatize?
Many developed and developing countries have privatized their railway networks in the past (Japan - 1980,Canada - 1995,etc). There is a joke from Kunal Kamra's stand up that we should start protesting "Bring back Simon" as the railways were left as it were since the British left it. Better late than never, its good to see finally its happening.
The fourth-largest railway network in the world is operated by the Government Of India. There is even a separate ministry allocated for it, Ministry of Railways. Despite that, the Railways claim they are not able to service the demand and have lost nearly 5 crore market share in the metropolitan cities during the festive and vacation seasons to other transports.
Good or bad?
Answering the question if it is good move or not, It has both positive and negative points.
Involving private players will make this industry to improve more in terms of infrastructure and maintenance because of the competitiveness. Comparing the present train fares with busses and flights the only cost reliable travel option for the people in India is trains, involving private will make the costs higher which effects a good section of people. Parties like CPI(M) and DMK have opposed the move.
After the announcement the shares of IRTC rose up which indicates that the Indian stock investors are welcoming this move. For now time will tell us how this turns out.
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