Government Ready to Open Railway Lines to Private Players

Government Ready to Open Railway Lines to Private Players

The Union government is open to the idea of giving operations of railway lines to private players for enhancing competition, Railway Minister Piyush Goyal said in an interview.

“It’s an exciting proposition. We will be able to generate competition in the process and improve customer satisfaction,” Mr. Goyal told The Hindu on board the Mahanama Express train, launched between Prime Minister Narendra Modi’s old constituency in Vadodara and his present one in Varanasi on Friday, ahead of the Gujarat Assembly elections.

Mr. Goyal, who took charge of the Railway Ministry on September 4 after Suresh Prabhu resigned following a string of derailments, said he was studying various models for attracting more private players.

No cap on safety funds

Claiming that he was willing to spend unlimited funds on safety, he said clearing the backlog for track renewal would be the focus, and a zero accident rate would be an aspiration.

“In my working, there is no budget for safety. Whatever (fund) is required we will spend,” Mr. Goyal said.

He said the government was engaging with other countries to “rapidly scale up” the bullet train project.

Mr. Goyal is also re-tuning policy to attract private companies for modernising railway stations.

To begin with, the Railways have decided to do away with the ‘Swiss Challenge’ model of awarding railway stations to private players and taken a slew of measures to lease out at least 100 stations.

The steps include increasing the lease tenure from 45 years to 99 years, allowing private players to sub-lease stations for increasing their investment value and mortgaging assets to allow banks to give low-cost funds, he said.

“We had a meeting with over 150 stakeholders (recently). All were interested in being a part of this journey of station redevelopment and land redevelopment but were constrained by the process being followed,” Mr. Goyal said.

Simplified bidding

“The process of bidding is going to be significantly simplified. We are doing away with Swiss Challenge unless in some case, the proposal is not before us and somebody suo motu gives a proposal. Then we will consider that model. But we will have single bidding parameter in other cases,” he added.

In July 2015, the Union Cabinet had approved redeveloping 400 railway stations on ‘as is where is’ basis by inviting open bids from private sector developers through the Swiss Challenge model under which any bidder can offer to improve upon a project proposal submitted by another player. However, the project developer, who had originally submitted the plan, is given an opportunity to match the bid amount.

Lukewarm response

The Railway Ministry has so far invited bids for 23 stations that had seen lukewarm response from the private sector prompting Prime Minister Narendra Modi to call for speeding up the public-private partnership plan in a review meeting held in April this year.

Mr. Goyal, who also holds charge of the Coal Ministry, said the Railways will move from diesel to electric locomotives.

“I am very keen that we should electrify the entire railway network. My mission is 100% electrification. Electricity is a domestic and self-sufficient resource whereas we have to import diesel. The Railways are investing Rs.16,000 crore every year in diesel consumption. So, I will save RS.8,000-10,000 crore,” he said.

After Mr. Goyal took charge, the Railways decided to shelve plans to set up a diesel locomotive plant in Marhowrah district of Bihar.

The project was part of the Rs.40,000 crore contracts awarded to General Electric (GE) and Alstom to set up diesel and electric locomotives factories at Marhowrah and Madhepura, respectively, in 2015