Tepid response to plans of passenger trains on PPP mode

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The central government’s ambitious plan of running passenger trains by collaborating with the private sector has received an underwhelming response from the bidders. Financial bids have been placed for only three out of the 12 clusters which were put forth for public-private partnerships (PPP), Mint reported citing people in the know. The report said the clusters which received limited bids are Delhi-1, Delhi-2 and Mumbai-2.

State-run Indian Railway Catering and Tourism Corp (IRCTC) was the sole bidder for the Mumbai-2 cluster where it asked for a revenue share of 18%. For Delhi-1, IRCTC and Megha Engineering and Infrastructure Ltd (MEIL), a Hyderabad-based firm, quoted revenue shares to the tune of 15.3% and 2.16%, respectively. IRCTC and MEIL’s quote for revenue shares for Delhi-2 stood at 6.3% and 0.54%.

Zero financial bids for 9 clusters

Bids were invited for 12 clusters which comprised 150 origin-destination pairs of routes. The total investment was pegged at around Rs 30,000 crores and over 12 firms had qualified for placing their bids. Mumbai-1, Chandigarh, Howrah, Patna, Prayagraj, Secunderabad, Jaipur, Chennai and Bengaluru got zero financial bids.

Competitive bidding 

The process for financial bids started on July 23 after a competitive bidding which included a Request for Qualification (RFQ) and a Request for Proposal (RFP). The process of these concessions is being run by RITES Ltd, a state-run transport engineering consultant.

As many as 120 applications were received from 16 firms. Out of these, 102 were deemed eligible for participation in the RFP stage for introducing 151 modern trains. Eleven applicants had qualified for participation in the RFP stage for the Mumbai-2 cluster, while nine and 10 applicants had qualified for the clusters of Delhi-1 and Delhi-2

Some of the notable firms which had qualified to place bids include GMR Highways, Cube Highways and Infrastructure III Pte, Welspun Enterprises, state-run Bharat Heavy Electricals Ltd and Spain’s CAF Group’s consortium.

The Ministry of Railways in a statement said the bids for PPP in passenger train operations were opened on July 23 and that it had received bids to operate 29 pairs of trains with approximately 40 modern rakes. The bids had come from both the public and private sector and involved an investment of around Rs 7,200 crore, the ministry added.