The Indian Railway Catering and Tourism Corporation (IRCTC) is seeking partners to form an SPV and bid for Indian Railways’s tender(s) for private train operations. In this context, IRCTC has invited Expression of Interest (EoI) applications from reputed and established firms (“Applicants”) to associate & form a consortium for jointly participating in the Tender(s).
Background:
- The Ministry of Railways, Government of India (“MoR” or the “Authority”) has recently floated request for qualification for selection of entities for operations of private passenger trains along – 100 routes, segregated into 12 clusters (individually “Tender” and collectively “Tenders”). Tenders, as issued by MoR for the 12 clusters, are as below:
- RFQ No. 2020/Trans.Cell/Elect./Train/I – Request for Qualification for Passenger Train Operations in Cluster-1 (Mumbai-1)
- RFQ No. 2020/Trans.Cell/Elect./Train/II – Request for Qualification for Passenger Train Operations in Cluster-2 (Mumbai-2)
- RFQ No. 2020/Trans.Cell/Elect./Train/III – Request for Qualification for Passenger Train Operations in Cluster-3 (Delhi-1)
- RFQ No. 2020/Trans.Cell/Elect./Train/IV – Request for Qualification for Passenger Train Operations in Cluster-4 (Delhi-2)
- RFQ No. 2020/Trans.Cell/Elect./Train/V – Request for Qualification for Passenger Train Operations in Cluster-5 (Chandigarh)
- RFQ No. 2020/Trans.Cell/Elect./Train/VI – Request for Qualification for Passenger Train Operations in Cluster-6 (Howrah)
- RFQ No. 2020/Trans.Cell/Elect./Train/VII – Request for Qualification for Passenger Train Operations in Cluster-7 (Patna)
- RFQ No. 2020/Trans.Cell/Elect./Train/VIII – Request for Qualification for Passenger Train Operations in Cluster-8 (Prayagraj)
- RFQ No. 2020/Trans.Cell/Elect./Train/IX – Request for Qualification for Passenger Train Operations in Cluster-9 (Secunderabad)
- RFQ No. 2020/Trans.Cell/Elect./Train/X – Request for Qualification for Passenger Train Operations in Cluster-10 (Jaipur)
- RFQ No. 2020/Trans.Cell/Elect./Train/XI – Request for Qualification for Passenger Train Operations in Cluster-11 (Chennai)
- RFQ No. 2020/Trans.Cell/Elect./Train/XII – Request for Qualification for Passenger Train Operations in Cluster-12 (Bengaluru)
- Indian Railway Catering and Tourism Corporation Limited (“IRCTC”) is currently operating 3 (three) passenger trains in India – Lucknow-Delhi Tejas Express, Ahmedabad-Mumbai Tejas Express and Indore-Varanasi Kashi Mahakal Express. With this hands-on experience of operating passenger trains on the Indian Railways network, IRCTC now intends to participate in the aforementioned Tender(s) issued by MoR.
- Interested Applicants may submit their EoI across any of the below category:
- Category 1–Rolling stock manufacturers OR rolling stock / aircraft leasing companies OR companies that manufacture / supply rolling stock components.
- Category 2 – Professional transport owners / operators (passenger trains, airlines etc.)
- Category 3 -Investors (including corporate, alternative investment funds, infrastructure investor / developers and other corporate investors.)
- Category 4–Branding cum hospitality Partners
The Applicant shall have a minimum Net Worth at the close of the preceding financial year,as below:
- Category 1 – INR 1,000 crore
- Category 2 – INR 1,000 crore
- Category 3 – INR 2,000 crore
- Category 4 – INR 200 crore
About IRCTC:
Indian Railway Catering and Tourism Corporation Ltd. (“IRCTC”) is a Mini Ratna (Category-I) Central Public Sector Enterprise under the Ministry of Railways, Government of India. IRCTC was incorporated on 27th September, 1999 as an extended arm of the Indian Railways to upgrade, professionalize and manage the catering and hospitality services at stations, on trains and other locations, and to promote domestic and international tourism through development of budget hotels, special tour packages, information & commercial publicity and global reservation systems.
The major activities of IRCTC include:
- Catering & Hospitality
- Internet Ticketing
- Travel & Tourism
- Packaged Drinking Water (Rail Neer)
Major highlights include:
Train Operations:
- Currently, IRCTC is the only player in the Indian market with private train operations experience. It was nominated by the Ministry of Railways to operate the country’s first non-Indian Railways run passenger train in 2019. This move acted as a pilot project for privatization of train operations for MoR. Presently, IRCTC operates the following trains:
- Tejas Express (Delhi-Lucknow)
- Tejas Express (Mumbai-Ahmedabad)
- Kashi Mahakal Express (Indore-Varanasi)
- IRCTC also runs Maharajas’ Express and Buddhist Express, which are top end luxury trains owned by IRCTC.
Composition of Consortium & Desired Roles
Shareholding:
- IRCTC – 40-49%
- Partner(s) – 51-60%
Indicative distribution of responsibilities:
IRCTC is primarily looking for an equity partner who can bring on-board investment as well as other technical / non-technical capabilities (rake procurement, hospitality services etc.).
While an SPV would be formed to bid for aforementioned tenders (or such other tenders), the indicative role delineation is given below:
- Role of the SPV (board managed) –
- Procurement (rolling stock / rakes)
- Accounts & Finance
- Admin & HR
- Branding and partnerships
- Rake O&M
- Other technical or non-technical roles not outsourced to IRCTC
- Role of IRCTC (outsourced from SPV) – Managing train operations (catering, marketing, ticketing, on-board operations)
- All equity investment would be on a pari-passu basis or as negotiated in the detailed shareholder’s agreement between the parties
Indicative process of selection:
- Pre-application discussion through VC to address any queries that prospective applicants may have in reference to this EOI
- Indian Railway Catering and Tourism Corporation Limited (IRCTC)
- Date – August 25th, 2020
- Time – 12:00 hrs
- Details of meeting link to be provided prior to meeting
- Receipt of EoI’s
- Evaluation of EoI’s and short listing subject to meeting net worth criteria as laid out
- Detailed negotiations (either through a limited tender or directly)
- MoU with the selected partner(s)
- Drafting of shareholder’s agreement
- Submission of bids for the IR tender(s) as a consortium
- Formation of the SPV as per agreed MOU and shareholder’s agreement in the event the consortium wins the IR tenders.
Note: The composition of the consortium / SPV between IRCTC and selected Partner(s) is flexible and would be guided by more detailed discussions and negotiations with shortlisted Partner(s).
The application should be addressed to:
GGM/SERVICES IRCTC Ltd, 2nd Floor, M-13, Punj House, Connaught Circle, New Delhi – 110001
Phone no. 011-23701101- 46, Ext – 720, 730, E-mail: ggmservices@irctc.com
Source: IRCTC-Tender | Image Credit (representational): MOR
