Government to Allow Private Train Operators in India for Bullet Train Corridor
The Indian Government has decided to open up India’s first Bullet train corridor between Mumbai and Ahmedabad to private train operators. This opens up the private sector to passenger train operations for the first time in India.
Indian Railways will operate the bullet train corridor for five years after it is commissioned. After that, the entire job of running the service will be in the hands of private operators. Innovative Collaborations, led by Arvind Panagariya, which had approved the project, has incorporated this policy move which has subsequently been approved by the Cabinet.
The move was prompted by the need for better efficiency of services, and also relieving the national transporter of a possibility of being saddled with a huge financial burden of running the expensive service. India has taken a leaf out of Japan’s book, in this case, because Japan, who are funding 81 per cent of this initiative, also has private operators running their bullet trains (Shinkansen), with the government owning 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. (source : The Indian Express)
It is believed that Railways had argued about giving such a large-scale project to private players is not a very smart move, citing examples that Japan took 20 years after the bullet train service was started, to bring in private players. France and Germany are other examples of countries’ governments running the service by themselves. It was finally decided that for the first five years of the service in India, the government will run it, after which private players may come in.
This is a risky move, considering the financial rate of return for the corridor will be 4 per cent. Thus it is necessary for the service to be a resounding success with high frequency.