Domestic Focus

Emphasis on indigenous production of rolling stock

Growing rail traffic has resultedin the increased requirement for rolling stock by Indian Railways (IR). At present, more than 322,000 units of rolling stock, comprising locomotives, coaches and wagons, are operational on IR’s network. Increasing importance is now being attached to the induction of energy-efficient rolling stock. Production-wise, programmes such as the Make in India initiative are expected to boost domestic production of rolling stock. The Rail Budget 2016-17 too allocated higher investment for the segment, which has been increased to Rs 272.78 billion in 2016-17 from Rs 190.87 billion in 2015-16.

Production units: IR’s indigenously produced rolling stock comes from its manufacturing facilities[s1]. These are Diesel Locomotive Works (DLW), Varanasi, Uttar Pradesh; Chittaranjan Locomotive Works (CLW), Chittaranjan, West Bengal; the Integral Coach Factory (ICF), Perambur, Chennai, Tamil Nadu; the Rail Coach Factory (RCF), Kapurthala, Punjab; Diesel Loco Modernisation Works (DMW), Patiala, Punjab; RCF, Rae Bareli, Uttar Pradesh; Rail Wheel Factory (RWF), Bengaluru, Karnataka; and Rail Wheel Plant at Bela. In 2014-15, DLW, CLW, RCF, and RFW posted a decline in output, while the output of ICF, RCF, Rae Bareli and RWF at Bela increased by 4.61 per cent, 7.69 per cent and 80.79 per cent respectively. Besides the RWF and RCF, all the units surpassed their production targets in 2015-16 (till December 2015). Almost all the production units are running beyond capacity, especially the DMW facility in Punjab, which is operating at over 200 per cent. The RWF is a new facility and production (and thus capacity utilisation) is commensurate with the progress of project development.

Thrust area: In a major policy decision, Indian Railways has decided to introduce Linke Hofmann Busch (LHB) coaches in all mail and express trains in a phased manner. By 2019-20, all the coaches on mail and express trains will be replaced by these coaches. LHB coaches in mail and express rakes and LHB chair car coaches have been inducted on select routes. Facilities such as the RCF and ICF are focusing on rolling out LHB coaches. IR plans to induct more energy-efficient rolling stock (three-phase electric locos) as well.

Recent developments

  •  IR awarded contracts to General Electric (GE) and Alstom to set up diesel and electric locomotive factories in Bihar at a cost of about Rs 400 billion. The diesel locomotive factory (DLF) in Marhowra that has been awarded to GE will cost Rs 20.52 billion. It will manufacture and supply modern diesel electric locomotives of 4,500 HP and 6,000 HP (which in combination can operate as multiple units of 9,000 HP and 12,000 HP). The facility at Madhepura, awarded to Alstom, will manufacture electrical engines, and entails an investment of Rs 12.93 billion. It will manufacture and supply modern electric locomotives of 12,000 HP. Under the agreement, 1,000 diesel locos will be manufactured over a period of 11 years at a basic cost of Rs 146.56 billion and 800 electric locos will be manufactured during the same period at a basic cost of Rs 199.04 billion.
  • An assured offtake agreement has been signed by the Ministry of Railways with Sail Rites Bengal Wagon Industry Private Limited (a joint venture c[JV] ompany of Steel Authority of India Limited (SAIL) and Rail India Technical and Economic Service [RITES]) for procuring 1,200 BOXNHL/BCNHL wagons per annum for a period of 10 years.
  • An MoU has been signed between the Ministry of Railways and Coal India Limited for the procurement of 2,000 wagons (33 rakes) in the first tranche.
  • RITES has awarded a contract to Bangladesh Railways for the supply of 120 broad gauge LHB passenger coaches.
  • A contract for the manufacture of BOXN25 Design B wagon prototypes has been awarded to Braithwaite.

Future outlook

IR’s proposed investment plan for rolling stock till 2019-20 is over Rs 1 trillion, about 12 per cent of the total investment plan. The government is also considering JVs, possibly with the private sector, to manufacture high-end coaches and locomotives used in long-haul trains under the Make in India initiative. Thus, there is certainly an increasing focus on indigenous procurement of various types of rolling stock. However, issues related to financing and monitoring that lead to slow progress in project execution need to be addressed at the earliest.

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