With the government is planning to allow private players to operate passenger trains by March 2023, the private operators will have flexibility in fixing train fare.
Indian Railways has decided to give freedom to private firms to fix fare for their trains as per market dynamics. Though earlier the railways had planned to set up a regulatory authority to fix fare/ tariffs, now it has decided not to do so, said an official.
The Railways is in view that the regulatory body may kill the competition among private players to woo passengers with an attractive fare.
The Railways, which held a second pre-bid meeting with interest players recently, also clarified that the railways may not regulate the prices. However, the railways in the view that if private players made cartels in fixing fares, passengers can approach the Competition Commission of India, said an official in the Railways.
Officials also said that if required in future the Railways can set up the regulatory mechanism. However, at present, the Railways don't have a plan to set to a regulatory authority.
Since the Railways is the first time opening the doors to private players to operate passenger trains, imposing too much regulation would harm its growth. Moreover, where ever the private trains will run, Railways will also operate its own passenger trains. If private players fixed higher price, then the passengers will choose trains operated by Railways, said the official.
The Railways plan to allow private operators to run passenger trains received good responses as a total of 23 big corporate houses participated in the recently held pre-bid meetings and shown interest to take part in the project.
The Railways had earlier invited 12 Request for Qualification (RFQ) from private players to run passenger trains on 109 important routes in 12 clusters through the introduction of 151 modern rakes.
The introduction of private trains in addition to existing trains to cater to the increasing demand with quality service. In 2019 total of 8.4 billion passengers travelled in trains while the number will be 30 billion by 2030. Keeping with demand, the Railways will continue to introduce new trains, it said.