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News Entry# 286927
Nov 27 2016 (11:52)  To help save on operational costs, metro rail decides to outsource ops (
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Posted by: For Better Managed Indian Railways~  948 news posts
CHENNAI: If Chennai Metro Rail has its way, metro trains in the city may soon be run by a private company. CMRL has called for bidders to operate its train services for the entire phase-1 of the project comprising two corridors up to a stretch of 45 km being built at a cost of Rs 14,000 crore.
CMRL has floated an expression of interest to attract private companies with expertise in running trains. Chennai will be the third metro rail unit in the country to privatise operations after Mumbai and Hyderabad. Experts said that while outsourcing train operations may not reduce ticket fares, it may cut down on operational expenses of CMRL, which depends on government subsidies to operate.
private company willing to run trains will be expected to operate and safely run the train services for CMRL for a period of five years. "We are just exploring the idea, as we promise our passengers a world-class experience with world-class technology . We have just called for expression of interest from companies. Many metros around the world have outsourced their train operations," a metro rail official said. "It is too early to say how outsourcing train operations would help us. We will experiment and see if it works to our advantage."
It is not the first time CMRL is attempting to privatise operations. A former metro rail official said companies were invited to bid for operating trains in 2012. But later, CMRL decided to recruit and train staff and operate trains on its own, as outsourcing worked out to be very expensive. CMRL ended up recruiting train operators and training them in Delhi and Bengaluru. "The idea behind outsourcing is purely for economic reasons. In 2012, the plan to outsource went up to the top level, but was later dropped as we found that it would cost us more than the amount we would spend in operating trains on our own," the official said."Right now, only if the cost of outsourcing is favourable for CMRL, officials will discuss the roles to be taken up by both CMRL and the private company."
Chennai Metro Rail may have picked up the idea from other metros in the country that have already outsourced their operations.Mumbai Metro Rail and Hyderabad Metro Rail have outsourced train operations to international companies, while Delhi, Kolkata and Bangalore have opted to run trains on their own.
Institute of Transporta tion and Development Policy South Asia, director, Shreya Gadepalli said that outsourcing of train operations may not reduce ticket fares. But it may cut down on the operating expenses of CMRL and eventually reduce the subsidy they may require from the government, as metro rails generally do not get enough money from ticket revenues to manage the expenses incurred in operating the service
"It is purely an internal decision to outsource. It is good if it reduces operating expenses because no metro rail ever gets enough money from the fare box for their operating expenditure. They will always require a public subsidy. So, by outsourcing if we reduce some of the operating expense, the subsidy required from the government will reduce," she said. "One cannot say if it will reduce the ticket cost for a passenger. That is more of a political decision."
With the metro rail project bringing in cutting-edge technology to the city that is on par with metros across the world, metro rail officials said they wanted to emulate what other metros around the world have been following in terms of operations and maintenance too.
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