When the railway board opened the bids in July, proposals were received for one cluster in Mumbai and two others in New Delhi. However, there were no takers for the Chennai cluster consisting of 13 routes in SR zone, including the six trains starting from Dr MGR Chennai Central.
Since July 2021 when the bids were opened for the nationwide privatisation of routes, not much progress has been made on the seven routes starting from Chennai Central, five from Tambaram and one from Kanniyakumari.
Trade unions said that sharing revenue with the railway department is the major stumbling block for route privatisation. Private players were unwilling to share revenue with the government.
DREU vice president R Elangovan said, “IRCTC had offered 18 per cent revenue share for Mumbai - II cluster. IRCTC offered 15 per cent and 6.5 per cent for the two Delhi (I and II) clusters. A private firm had offered 0.54 per cent for the same cluster for which IRCTC had offered 6.5 per cent revenue share to the Railway department. Big players like GMR and Adani were among the 16 companies that participated in the pre-bid meetings. But, only one no private firm has placed a bid. IRCTC was the highest bidder for the three clusters. Now, how will they privatise the routes now.”
Arguing that the private parties were insisting on not sharing revenue with railways, Elangovan said, “Private firms might even pay the minor haulage charge for using the entire railway infrastructure and manpower. Railway Ministry had even offered to not operate trains an hour before and after their (private) trains start. The Railway Ministry appears to be ready to even reduce the lease period to less than 25 years. Nonetheless, no one has evinced interest because they are unwilling to share revenue. Private operators will naturally increase fares to make a profit. They know it will only encourage people to either use the government operated trains or choose buses. Hence, they are showing no interest.”
A highly placed railway officer unwilling to be quoted said that privatisation of trains has failed the world over because it is not easy to operate trains profitably.
However, Elangovan said, “Divestment is their core principle. They will exploit disinterest among private players as an excuse to dispense with revenue share for railways. Invariably, they will sell it to private units without revenue share.”