Home / Companies / News /  Govt to outsource operations at five railway stations

New Delhi: Indian Railways has decided to outsource operation and maintenance of five railway stations to firms outside state control for 15 years to improve customer experience.

The railway stations, to be outsourced under the pilot project called Integrated Station Management, are Pune, Bengaluru, Secunderabad, Anand Vihar (in New Delhi) and Chandigarh.

These five stations, along with the Habibganj railway station in Bhopal, will take the number of stations in India being privately managed to six.

According to Indian Railways, the stations will be handed over to state-run Indian Railways Station Development Corp. (IRSDC) for a makeover. IRSDC will subsequently invite bids from private firms for operation and maintenance of the stations. 

The firms that win the contracts will handle operations such as selling platform tickets, running station stalls, railway display network, advertising on station and its premises and parking. However, all core operations such as signalling and movement of trains will remain with the Railways.

A senior government official, on condition of anonymity, said: “Railways is in process of signing agreements for handing over the stations to IRSDC. Once it’s done, they will be responsible for undertaking the bidding process." 

The idea is to have expert management firms on board that have experience managing hotels too, the official said.

The revenue sharing model for the five stations is yet to be finalized, and will most probably be based on gross operating profit model (profit after subtracting all operating expenses) that is followed by the hotel industry, the person said. 

IRSDC managing director S.K. Lohia confirmed the development, but declined to comment further as the agreements have not yet been signed. 

Indian Railways’ ambitious station re-development project is facing several hurdles, including concerns raised by Niti Aayog and the finance ministry on funding and leasing, the railways failing to find investors for brown-field projects and real estate developers demanding more incentives. 

In the Union Budget 2018-19, finance minister Arun Jaitley had announced that the government will modernize 600 railway stations across the country. According to the railways plans from last year, 130 railway stations would be modernized through public-private partnership model by the IRSDC and zonal offices of railways. However, the plan hit a roadblock after investors didn’t show interest and last week, the railways announced that 68 stations will be revamped using its own resources.

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