Railway Privatization
Railway Privatization
Overview
Railway Privatization in India refers to the gradual opening of rail infrastructure, operations and passenger services to private sector participation while Indian Railways (IR) retains ownership of the national rail network. The policy aims to bring investment, technology and managerial efficiency without privatising the entire system.
Key Facts & Figures
| Fact | Detail |
|---|---|
| First private train under PPP | Tejas Express (Delhi-Lucknow) flagged off on 4 Oct 2019 |
| Operating agency of Tejas | IRCTC (Indian Railway Catering & Tourism Corporation) |
| Second Tejas route | Mumbai–Ahmedabad, launched 17 Jan 2020 |
| 100% private train project name | “Bharat Gaurav” scheme launched Nov 2021 |
| Private trains announced in 1st batch | 12 routes (109 origin-destination pairs) – May 2020 bid |
| Investment target from private trains | ₹30,000 crore (~US $4 bn) |
| Concession period for private trains | 35 years |
| Revenue-sharing model | Gross Revenue Share (GRS) – lowest bid wins |
| First private freight terminal | ICD Whitefield (Bengaluru) – 2005 |
| First private container train operator | Box’N’Rail (2007) after Container Policy 2005 |
| Dedicated Freight Corridor (DFC) O&M concession | 30-year O&M contract awarded to DFFCPL (2021) |
| Station redevelopment flag-ship | Habibganj (Bhopal) – first PPP station (awarded 2017) |
| National Monetisation Pipeline (NMP) stations target | 400 railway stations (2022-25) |
| PPP policy for track, signalling & rolling stock | “Make-in-India” + 75% domestic procurement mandatory |
| Highest bidder for 12 trains | RK Associates – quoted 0.54% revenue share |
| Current status of 12-train bid | Annulled by Railways in July 2022; fresh bid under drafting |
Important Points
- Indian Railways never privatised; only selected services opened to PPP.
- Ownership of tracks, land and signalling stays with Ministry of Railways.
- Private trains pay haulage charges (track usage fee) + energy charges + share of gross revenue.
- IRCTC-run Tejas trains follow dynamic fare pricing; no subsidy, no concession.
- Private passenger trains must adhere to 130 km/h max speed, LHB coaches & Kavach safety features.
- 90% of train crew (loco-pilots, guards) still Railway employees even on private trains.
- Private operators free to procure rolling stock globally but must maintain in Indian facilities.
- “Bharat Gaurav” trains can be themed (religious, cultural) and need not follow regular mail/express fare.
- No privatisation of existing mail/express trains; only new “premium” services offered.
- Freight privatisation started earlier: container, tank & automobile trains allowed since 2005.
- National Rail Plan (NRP) 2030 targets 1600 km green-field lines through PPP.
- Private sidings and freight terminals now exceed 300, reducing Railways’ capital burden.
- Vande Bharat sleeper & Vande Metro next in line for PPP manufacturing, not operation.
- Land lease for private stations max 45 years; redevelopment must preserve heritage façade where applicable.
- Safety certification by RDSO & Commissioner of Railway Safety mandatory for all private rolling stock.
Frequently Asked in Exams
- Which was India’s first private semi-high speed train and who operates it?
- Difference between Tejas Express and the proposed 12 PPP trains.
- Revenue-share vs cost-share model in Railway privatisation.
- Name the two corridors on which private freight trains are most active.
- Constitutional status of Indian Railways – why full privatisation is not pursued.
Practice MCQs
Question:01 Which company operates the first private Tejas Express train of Indian Railways?
A) Indian Railways
B) IRCTC
C) NTPC
D) DMRC
Show Answer
Correct Answer: B
Explanation: Indian Railway Catering and Tourism Corporation (IRCTC) is the PSU that runs the first private Tejas Express services—Lucknow-Delhi and Mumbai-Ahmedabad—under the 2026 operational model.
Question:02 The concession period for the 12 proposed private passenger trains is
A) 25 years
B) 30 years
C) 35 years
D) 40 years
Show Answer
Correct Answer: C
Explanation: The Indian Railway Board has fixed the concession period for the 12 proposed private passenger trains at 35 years under the PPP model.
Question:03 Which railway station became the first to be redeveloped under the PPP model in India?
A) New Delhi
B) Mumbai Central
C) Habibganj (Bhopal)
D) Howrah
Show Answer
Correct Answer: C
Explanation: Habibganj railway station in Bhopal, Madhya Pradesh, was the first Indian station taken up for redevelopment under the Public-Private Partnership (PPP) model, marking the start of the Railways’ station modernization drive.
Question:04 [What revenue-sharing model has been adopted for private trains in Indian Railways?]
A) Net Profit Share (NPS)
B) Gross Revenue Share (GRS)
C) Fixed License Fee (FLF)
D) Hybrid Annuity Model (HAM)
Show Answer
Correct Answer: B
Explanation: Indian Railways has adopted the Gross Revenue Share (GRS) model for private trains, where the concessionaire pays a predetermined percentage of the gross revenue earned from the train operations.
Question:05 In which year was the Container Policy permitting private freight operators announced?
A) 2003
B) 2005
C) 2007
D) 2009
Show Answer
Correct Answer: B
Explanation: The Indian Railways announced the Container Policy in 2005, allowing private freight operators to run container trains, thereby liberalizing rail freight operations.
Question:06 The maximum permissible speed for private passenger trains is
A) 110 km/h
B) 120 km/h
C) 130 km/h
D) 140 km/h
Show Answer
Correct Answer: C
Explanation: As per Indian Railway’s 2026 operating guidelines, private passenger trains are capped at 130 km/h on conventional tracks to balance commercial viability with safety standards.
Question:07 Which train scheme allows private operators to run themed tourist trains?
A) Bharat Gaurav
B) Vande Bharat
C) Amrit Bharat
D) Tejas Express
Show Answer
Correct Answer: A
Explanation: The Bharat Gaurav scheme, launched by Indian Railways, permits private players to operate theme-based tourist circuit trains showcasing India’s cultural, historical and natural heritage.
Question:08 Private train operators must pay haulage charges for
A) Station maintenance
B) Track usage
C) Ticket booking services
D) Locomotive leasing
Show Answer
Correct Answer: B
Explanation: Haulage charges are levied on private operators for the use of railway tracks, covering the cost of infrastructure and operations.
Question:09 The bid for 12 private trains was annulled in
A) July 2020
B) July 2021
C) July 2022
D) July 2023
Show Answer
Correct Answer: C
Explanation: The Indian Railways annulled the bidding process for 12 private train services in July 2022.
Question:10 National Monetisation Pipeline aims to monetise how many railway stations by 2025?
A) 250
B) 300
C) 400
D) 500
Show Answer
Correct Answer: C
Explanation: The National Monetisation Pipeline (NMP) has set a target to monetise 400 railway stations by 2025 through leasing out their operations and commercial rights to private players, thereby unlocking value and improving passenger amenities.
BETA
