INDIAN Railways has finally agreed terms with Sterling Resorts to operate two of its eight planned luxury tourist trains, under a profit sharing agreement (RG 2.98 p87). A memorandum of understanding signed in March after three years of negotiations provides for Sterling to own and staff the train, which will be operated and maintained by IR at cost. In addition IR will receive 15% of gross annual profits.

Sterling will operate both the Delhi - Agra - Varanasi loop in the north and the Chennai (Madras) - Bangalore - Hyderabad - Ooty route in the south. Tenders have been called for private partners to run tourist trains over five other routes, but the planned Bodh - Gaya operation targetted at Japanese tourists has been put on hold following objections from the Uttar Pradesh government. IR is budgeting to earn around Rs1bn a year once all eight projects are operational.