Updated: September 18, 2020 10:14:09 pm
India asked companies to present their interest in operating passenger trains on 109 origin-destination routes through 151 trains in July
India will allow private companies to set passenger rates once train services start operating, a move aimed at attracting investors as Prime Minister Narendra Modi opens one of Asia’s oldest networks.
“Private players have been given the freedom to set rates in their own way,” VK Yadav, chairman of the Board of Indian Railways, told reporters. But, “air-conditioned buses and planes also operate on those routes, and they should take this into account before setting rates.”
Rail fares are politically sensitive in India, where trains carry as many passengers as Australia’s population every day, and a portion of the country’s poor depend on the expanding network for their transportation. While the network has been beset by decades of neglect and inefficient bureaucracy, the Modi administration has invited private companies to participate in everything from modernizing stations to operating trains.
Furthermore, the decision to partially open up the rail sector comes as Modi finds himself with limited fiscal space to support Asia’s third-largest economy, which is struggling with its first contraction in more than four decades.
Alstom SA, Bombardier Inc., GMR Infrastructure Ltd. and Adani Enterprises Ltd. are among the companies that have expressed interest in these projects, Yadav said. These projects can generate investments of more than $ 7.5 billion in the next five years, according to estimates from the Indian Ministry of Railways.
Rail modernization is crucial for Modi, which is banking on low-cost loans from Japan to build the country’s first bullet train in 2023. The government has taken steps to increase the speed of passenger trains, which sometimes move slowly. .
India asked companies to submit an interest in operating passenger trains on 109 origin-destination routes through 151 trains in July, and has sought investor interest in modernizing railway stations, including those in New Delhi and Mumbai. Today’s rail network is congested and aging, dating back to British colonial rule in 1853.
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