Private Trains Will Be Able To Decide Own Fare, Offer Preferred Seats

As the Indian Railways gears up to run 151 trains across 100 routes via public-private-partnership (PPP), freedom has been provided to private firms to run these trains like airlines.

Private firms will be able to set their own fares, offer additional services to passengers like onboard meals, preferred seats, baggage services, etc. Passengers may be charged extra for services like these, the earnings from which will be part of the gross revenue to be shared with the Railways department, according to a document from the national transporter.

These private will use the existing Indian Railway Passenger Reservation System for booking of tickets, however, a mechanism will be built in to transfer the revenue earned to an escrow account, said the Project Information Memorandum Document (PIM) released by the national transporter. The PIM aims to give prospective bidders a broad understanding of the proposed passenger train operations.

The Indian Railways had recently floated a request for qualification (RFQ) inviting private entities to operate passenger trains on its network. The decision on whether to charge customers for these services will rest with the private entities. The document said that the bidders, based on their financial capacity will be required to offer a share in the gross revenue at the request for proposal (RFP) stage for undertaking the project.

While private firms have been given the freedom to fix the fare to be charged to passengers, they also have to freedom to expore other avenues to generate revenue.

The gross revenue will include amount accruing to the concessionaire from the passengers from services such as amount printed on ticket- fare, amount from preferred seat options, baggage, cargo, if it is not included in the ticket fare, amount from on-board services such as - catering, bed roll, content on demand, wi-fi. "Any amount accruing to the concessionaire on account of advertising, branding and naming rights pursuant to the concession agreement," the document said.

Private entities will also be free to procure trains and locomotives from a source of their choice, provided such trains and locomotives are compatible with specification and standards specified in the concession agreement.