NITI Aayog CEO hails Railway privatisation, says it's a "win-win situation"

Amitabh Kant CEO of NITI Aayog, National Institution for Transforming India on Thursday called privatisation of trains a "win-win situation" for Indian Railways. The private sector investment in Railways is valued at about Rs 30,000 crore.

New Delhi: NITI Aayog CEO, Amitabh Kant calls privatisation of trains a "win-win situation" for Indian Railways as well as for the investors, saying that it will bring modern technology in trains for undertaking passenger business, using the already existing infrastructure.

Kant was addressing a press briefing along with Chairman Railway Board, Vinod Kumar Yadav, in which he also informed that the request for quotation has already been floated and the due date for application is October 7, 2020.

"We are very confident that it'll bring in modern technology as well as investments in India from all across the world. This creates a win-win situation for Indian Railways as well as for investors by tapping into the potential of huge unmet demand in the passenger business," he said.

Kant further added, "The modernization of Railways will bring a paradigm shift, as it will help re-write the growth story of India. Quality train services, new technology and value-added service will enhance user experience."

When asked about the consequences of private investments in Railways, NITI Aayog CEO replied, "So many private players came in the banking sector. But that didn't lead SBI to shut. Private investment will bring in newer technologies. It will create competition in the Railway sector. The competition will increase efficiency and reduce fare in a longer run, radically changing India."

The private sector investment in Railways is valued at about Rs 30,000 crore. Under the privatization of trains, there will be 109 origin destination pairs, which have been divided into 12 clusters requiring 151 trains. Replying to a question on airport-like user charge to be levied for redeveloped Railway stations, Yadav said that it will be very nominal and the amount collected from there will be used for providing more facilities in railway stations.

As Indian Railways has decided that private players will be able to determine their own fares, the Railway Board Chairman also clarified that the charges will be in competition from bus fares and air fares, therefore it can't be exorbitant in any circumstances.

According to an initial timeline drawn by Railways, a plan has been rolled out to start the operations of all 151 private trains by 2027. The first set of 12 private will be introduced in 2023, followed by 45 trains being introduced in 2024.

VK Yadav also informed that the station redevelopment work of Habibganj and Gandhinagar is in advance stage and is expected to be completed by 2022.

"Our objective is to redevelop close to 50 railway station by the end of next year. This would mean an investment of close to 1 lakh crore in Indian Railways," said Amitabh Kant.