Image Source: Indian Express

Designing the new business segment of private train operations in India, the Indian Railways has worked out strict rules for private operators � they will pay heavy damages to the Railways if trains are late or even early and must guarantee at least 95 per cent punctuality each year to avoid financial penalties.

Since it will be a revenue-sharing arrangement with the government, Railways will depute its �representatives� in the offices of the private companies to ascertain that they are reporting their earnings �honestly and faithfully�.

If actual revenue is found to be more than 1 per cent of what is reported, the private firm will pay 10 times the difference thereof as damages to Railways.

These are part of the Key Performance Indicators for private players to adhere to when they run passenger trains in India. The Railways made the Draft Concession Agreement public on Wednesday, when the second pre-application meeting of prospective bidders took place to discuss queries.

For every 1 per cent reduction in the punctuality of a train from the guaranteed 95 per cent, private operators will have to pay extra haulage charge worth 200 km of the train operation.

The haulage charge is Rs 512 per km for all private trains. This is the money private trains must pay to Railways for use of its infrastructure and physical transportation of the train.

Similarly, for every train that arrives at the destination at least 10 minutes in advance, the private company will pay the Railways incentive in the form of extra haulage charges for 10 km.

However, if a train loses 1 per cent punctuality in a year for reasons attributable to the Railways, the latter will pay the private company damages equal to 50 km of haulage charges.

If train service is cancelled, then the private party will still pay Railways haulage equal to one-fourth of the total haulage payable for that journey. And if such cancellations amount to more than a month in a year, the company shall pay Railways full haulage.

Alternately, if trains are cancelled due to any fault of the Railways, it will pay the concessionaire one-fourth of the haulage as penalty. However, a private company cannot cancel a train if the delay in departure of a train from the originating station due to reasons attributable to Railways is within 15 per cent of the total travel time or two hours, whichever is higher. In other words, even if a private train has a delayed departure for up to two hours due to the Railways� fault, the national transporter will not pay any damages to the private player.

However, if trains are delayed due to cattle or humans run over, agitations, bad weather and such reasons beyond the control of both the Railways and the private player, no one will pay anyone any amount.

The deadline for the bidding process is September 8. Seven more firms have been added to the list of 16 companies which took part in the first meeting of prospective bidders last month, taking the total number to 23.

Among big corporate names in the list were L&T Infrastructure Projects Development Limited and Siemens Limited. Bombardier, Alstom, Titagarh Wagons, CAF India, Gateway Rail, Sterlite Power of the Vedanta Group, BHEL, BEML, and IRCTC are among other major players.

Sources said that GMR has shown interest in almost all the 12 clusters.

Like many government tenders since last month, the Railways has also inserted a corrigendum to cite the latest Finance Ministry circular that makes it harder for Chinese companies to supply to these firms.