Indian Railways to Lease Out Hill Trains to Private Players

Indian Railways to Lease Out Hill Trains to Private Players

The Indian Railways is to start leasing out its standalone passenger corridor and branch lines to private companies for operations and maintenance, marking the new beginning of corporate participation for the running of the world’s 4th largest railroad network. Narrow and meter-gauge tracks connecting the colonial era hill stations are set to be the first of the 108,000 km rail network to be run privately. Largely unprofitable routes linking Kalka and Shimla, Siliguri and Darjeeling, the NilgiriBSE 0.00 % mountains to the plains, Neral and Matheran, and the Kangra Valley railways would be among the first the government will likely select to bid out to the private operators, which may comprise of overseas companies as the existing policy on investment in railways allows 100% external ownership.

The Indian Railways, with a workforce of 1.54-million and about 6,800 railway stations, runs about 7,000 trains everyday to carry passengers, but the activity is generally unprofitable. In the financial year ending on March 31, 2017, the losses from the passenger segment of the railroad operations are projected to be of Rs 33,000 cr, about 10% higher than the losses for the previous financial year. To minimise the operating losses, Indian Railways is looking forward to innovative venture opputunities, that also helps the government to achieve part of its social objective of subsidising mass transportation, the Indian Railways is also using tourism to attract private companies, particularly those from the infrastructure and hospitality industries.