The government intends, in its first report on Indian Railways (IR), to allow private companies to create and operate new premium travel services on the national rail network.
This gives Australian companies with relevant rail and financial experience partnership opportunities who should follow the course of the procurement.
New paths
To implement 151 modern 16-coach trains to operate on 109 new lines, the Delhi Ministry of Railways issued a request for qualifications on 1 July, to privately held businesses.
The initiative has generated business interest. A vast range of renowned local and global firms – including prospective investors – seemed likely to react during pre-application meetings. The project will involve an investment of approximately A$6 billion (total 30 thousand crores). It aims at releasing the value intrinsic to premium rail travel in India by implementing much-needed efficiencies in train operations and providing world-class passenger services.
In passenger rail services, there is considerable unmet demand. Approximately 50 million potential passengers could not be taken up by trains in 2019-20. The demand exceeded its supply by an estimated 13.3 percent during the summer and festival seasons. The railways lose their market share for freight transport constantly because of capacity constraints.
The Railways Ministry wishes to allow trains on commercially viable routes to the private sector. The Ministry’s goal is to capture passengers’ demand for better services, convenience, and convenience.
We hope the private sector will provide a better travel experience and increased revenue from meeting the demand for efficient premium passenger services.
Functions of the project
Up to 109 routes are expected to be grouped into 10–12 clusters. This includes about 12 rakes per cluster with approximately 150 rakes (or train sets).
The Department is open to proposals on the integration of technologies in the sets.
Flexibility on technological sources, subject to the required standards and specifications, also opens up to the Ministry of Railways.
The concession lasts 35 years and includes the right to collect price-related fares on the market. Additional features are:
Class composition flexibility,
Flexibility to compose the classes and stops the ability to provide customer service with value-added and differentiated track access and signalling networks on a gross revenue- share basis on fixed freight charges.The operations are expected to commence three years after contract awarding and 100% of trains will operate in five years.
Potential players
The project provides bidders with flexibility in service delivery and scope for innovation. Bidders can, for example, offer to purchase or lease coaches. This means it can be participated by non-rolling stock manufacturers.
It is also possible for operators to develop premium, value-added services on board and thus establish fare structures.
New safety features such as electronic sliding doors, noise-free travel systems, double- glazed safety glass windows and train, and passenger tracking systems, and passenger information systems are included in draught specifications.
The project was attracted by reputable local and international organizations. The Ministry of Railways organized a pre-application meeting that included 23 companies such as Bombardier, Alstom, Siemens, CAF, GMR Infra, Bharat Forge, BEML, L&T Infra, Gateway Rail, Titagarah Wagons, Sterlite, Medha Group.
Several financial institutions, including the National Investment and Infrastructure Fund (NIIF), Macquarie, and I Squared Capital participated in a stakeholder meeting to discuss concession agreements.
Australian companies’ opportunities
This tender offers Australian companies with sophisticated passenger rail networks experience opportunities. In addition, Australian train operators have opportunities to partner with reputable Indian companies, including those above.
The project could also provide Australian SMEs with niche-related technologies with excellent opportunities, including:
Predictive on-board maintenance optimization and scheduling of safety and surveillance monitoring and control solutions Training and skills in the field of coach interior and retail equipment on board of facilities management.
Further Steps to be initiated
It is advised that companies seeking opportunities track their procurement processes so that successful bidders and train operators in each cluster are identified.
Australian firms could explore approaching firms listed for their solutions at the RFQ stage. At the beginning of 2021, contract awards are anticipated.
