In this article, we will discuss Privatization in Railways (Key Points). So, let’s get started.
Privatisation
- Under this at least 151 modern trains will be introduced and 109 pairs of routes will be planned out for private train operations.
- Train sets have to be brought by private operators and maintained by them.
- Fares in private trains will be competitive and prices on other modes of transport like airlines, buses have to be kept in mind while fixing the fares
- Private participation in passenger train operations will only be 5% of the total operations of Railways. 95% of trains will still be run by Indian Railways.
- The project will bring private sector investment of about Rs. 30,000 crore.
Reason
- To develop India’s railway infrastructure to provide travel services to all its passengers.
- According to the 2019-20 data, the Railways ferried 8.4 billion (840 crore) passengers in 2019-20, about five crore passengers could not be accommodated, meaning their wait-listed tickets were dropped.
- During the busy seasons/summer season nearly 13.3% passengers were not able to get confirmed reservations.
- Induction of modern technology and reduction in transit time and the demand-supply deficit in train tickets.
Benefits
- Confirmed tickets and faster trains for passengers.
- Trains would run faster and would be safer and provide more facilities.
- Reduction in maintenance cost of train coaches.
- The train coaches now required maintenance after they ran 4,000 km, but modern coaches would need maintenance after every 40,000 km or once or twice in 30 days.
- Reduction in railways loss. Currently, the railways makes losses in passenger services.
- Provide revenue to railways for future operations.
- The private entity will pay the Railways fixed haulage charges, energy charges as per actual consumption and a share in gross revenue determined through the bidding process.
- RFQ had been issued under the Make in India policy. So the coaches would have to be manufactured in India.
- This will create jobs and utilisation of local components in manufacturing.
