India opens railway network to private players

WION Web Team New Delhi, Delhi, India Jul 02, 2020, 05.04 PM(IST)

File Photo: An Indian Railways employee places 'fog signals' on a railway track as a train passes in dense fog at a railway station in Amritsar. Heavy fog has disrupted road, rail and air traffic across northern India. Photograph:( AFP )

Story highlights

In an announcement on Wednesday, the railway ministry said it would now permit businesses to run trains along 109 routes, inviting bids from firms. This has come in the aftermath of New Delhi opened up coal mining to the private sector.

India has opened up its vast railway sector to private companies, allowing firms to operate trains on certain routes -- in a bid to boost its virus-hit economy.

In an announcement on Wednesday, the railway ministry said it would now permit businesses to run trains along 109 routes, inviting bids from firms. This has come in the aftermath of New Delhi opened up coal mining to the private sector.

"This is the first initiative of private investment for running passenger trains over Indian Railways network," the ministry said in a statement.

"The objective of this initiative is to introduce modern technology rolling stock with reduced maintenance, reduced transit time, boost job creation, provide enhanced safety, provide world class travel experience to passengers," it added.

The project will require an investment of $39.8 million and private players will have to pay the government fixed haul charges and a percentage of profits determined during the bidding process. 

Prime Minister Narendra Modi has sought to privatise a range of industries that have been under state control for decades, sparking criticism from the opposition Congress party.

Asia's third-largest economy has been clobbered by the pandemic and a months-long lockdown, growing at its slowest pace in at least two decades last quarter. The shutdown, which put millions out of work overnight, is widely expected to plunge the country into recession. 

Fears for the economy prompted the government to allow many businesses to resume operations starting last month despite an ongoing increase in infections, which have now crossed 6,00,000.