Bullet trains will go to private operator after first 5 years

The Arvind Panagariya-led Committee on Innovative Collaborations, which had approved the project, has incorporated this policy move which has subsequently been approved by the Cabinet.

Written by Avishek G Dastidar | New Delhi | Updated: January 6, 2016 2:11 am
bullet train, india bullet train, japan bullet train, shinzo abe, shinzo abe in india, news Representational image

The government has decided to open up India’s first bullet-train corridor between Mumbai and Ahmedabad to private train operators paving the way for the private sector in passenger train operations for the first time in the country.

As per the decision, Indian Railways will operate the bullet train corridor for five years after it is commissioned. After that private players will run the train service — translating into managing the rolling stock, the onboard services, the fares and other charges.

The Arvind Panagariya-led Committee on Innovative Collaborations, which had approved the project, has incorporated this policy move which has subsequently been approved by the Cabinet.

Better efficiency in services and relieving the national transporter of a possibility of being saddled with a huge financial burden of running the expensive service are believed to be some of the reasons behind the move. Japan, which is funding 81 per cent of the project, also has private operators running the Shinkansen — a version of which will be rolled out in India — whereas the government owns the infrastructure.

Railways will formulate a policy, which will enable the private players to come in and either share revenue with or pay a certain amount of fee to the national transporter for the service, sources said. As per the official timeline, the service is expected to commence by 2022 and Prime Minister Narendra Modi is said to be keen that the timeline is adhered to.

Sources said Railways had argued before the high-level committee that a public infrastructure project with such a huge viability gap funding should not be given away to private players on a platter.

Moreover, since Mumbai-Ahmedabad is one of the many bullet-train corridors coming up in India in the future, Indian Railway needs to attain the expertise and the upgraded know-how required to run a bullet-train service professionally and efficiently, the committee was told. It was also highlighted that even in Japan, Shinkansen’s operations went to private players a good two decades after the service was started in the 1960s. France and Germany, both have government arms running the trains. Eventually, it was agreed that Indian Railways will run the operations in the first five years after which private players will come in.

As per the feasibility report of the corridor prepared by Japan, the service needs to have good frequency in order to generate maximum traffic and earn the maximum money possible. This is because the financial rate of return of the corridor is below 4 per cent, so the viability of its operations hinges on more playing the corridor and not less.

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  1. P
    Party_Fund
    Jan 4, 2016 at 11:56 am
    Ambani, Adanis will be the only operators who will FUND BJP PARTY!
    Reply
  2. I
    Incompetent_indians
    Jan 4, 2016 at 11:57 am
    Shame: the representational image is also stolen from Chinese bullet train.
    Reply
    1. T
      TIHAEwale
      Jan 4, 2016 at 8:55 am
      After seeing Anil Ambani up Airport Express even as DMRC delivers and runs Delhi metro carrying over 28 lakh pengers daily it is clear Ambani should notget this project others may not bid for it as airfare will be cheaper than bullet train fare . the project is another gas from Feku56
      Reply
    2. A
      Anil
      Jan 4, 2016 at 12:05 pm
      And if the project does materialize and is successful, will you inhale your own gas? Or that of your masters in the DYNASTY, who's script you read from everyday?
      Reply
    3. A
      Annadurai Jeeva
      Jan 9, 2016 at 6:42 am
      In spite of being a socialist in thoughts, I expect all the trains to be auctioned to private operators because I was a member of the Ticket Checking Organisation in Southern Railway. Only such a prudent step will ensure definite returns to Railway's exchequer.
      Reply
      1. H
        Harish Sharma
        Jan 5, 2016 at 5:36 am
        Good decision. We will get good services though...
        Reply
        1. R
          RW911
          Jan 5, 2016 at 1:25 pm
          You really don't understand the meaning of a 'representational image' do you?
          Reply
          1. N
            Nikhil
            Mar 2, 2016 at 6:24 am
            Rail budget 2016 New trains from mumbai to ahemdabad bullet train from Mumbai to ahemdabad New guju's going back from mumbai to ahemdabad oop's sorry from ahemdabad to mumbai. Lolz.....
            Reply
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