Summary:
New Delhi: Indian Railways, the world`s fourth-largest network, is seeking investments from private firms to operate passenger trains for the first time, an initiative that could potentially revamp a notoriously inefficient system.
The Ministry of Railways asked companies to submit their interest to run passenger trains over 109 origin-destination routes via 151 trains, according to a statement Wednesday.
The project will entail an investment of about 300 billion rupees ($4 billion), the ministry said.
Getting private companies to invest is crucial for Prime Minister Narendra Modi, who needs to tap new sources of cash to boost economic recovery and create jobs, as the coronavirus pandemic wreaks havoc for the poor in the country.
The decision to partly open up the railway sector comes as PM Modi finds himself with limited fiscal room to support the country, Asia`s third-largest economy, which is headed for its first contraction in over four decades.
Indian Railways, which started operations in 1853, began the process of outsourcing passenger services by allowing Indian Railway Catering & Tourism Corp, a publicly listed state-run firm, to run some trains last year.
It said Wednesday selected private firms will have to manufacture a majority of the trains locally, and will be responsible for financing, procuring, operation and maintenance of the services, although drivers and guards will be provided by the state-run enterprise.
IRCTC jumped 4% at 12:05 pm in Mumbai, while Rail Vikas Nigam Limited, which provides rail infrastructure services, surged 8%.