Category:Private Railways

From 1862, the Government (both in Calcutta and in Westminster) began to seek the construction of railways in India on terma more favourable (to Government) than those of the original guarantee, and to induce private investors to undertake construction at their own risk and expense. The modified terms available offered land free of cost and an operating subsidy specified for a period of time.

Two companies commenced works under these altered arrangements but the terms proved too onerous and the Indian Tramway Company paid the ultimate price of liquidation in 1870. Three years previously, in 1867, the Indian Branch Railway Company sought assistance from the Government of India (GOI) and was offered a contract with terms similar to (but less generous than) the original guaranteed companies. This new deal became the model for subsequent assisted railways although it did not stop the GOI from again encouraging the formation of further private railways between 1880-1882.

However, before then, as the 1860s drew to a close, famine in Orissa and drought in Rajputana drew attention to the continued slow pace and high cost of railway construction. The first change in policy since 1850 saw the emergence of the 'State Railway'.