Recent Developments: Exploring new areas of growth

Exploring new areas of growth

In the past year, the railway sector posted an increase in capacity, both in terms of commissioning of new lines as well as electrification of existing ones. Big-ticket projects such as the dedicated freight corridor (DFC) project continued to gather pace. The past 12-15 months saw Indian Railways (IR) signing an array of MoUs with state governments to fast track development work. New areas such as high speed rail (HSR), use of renewable energy and rail connectivity in the north-eastern region also attracted attention.

Indian Infrastructure provides a snapshot of key developments in the past year…

  • One of the most noteworthy developments in the year was the incorporation of National High Speed Rail Corporation Limited in February 2016, which was formed to plan and design the technical parameters for HSR systems and undertake feasibility and techno-economic studies for selected corridors. An MoU has been signed by the governments of India and Japan for the Mumbai-Ahmedabad HSR project.
  • As part of the Make in India initiative, IR signed agreements with GE Diesel Locomotive Private Limited and Alstom for the setting up of a diesel locomotive factory at Marhowra, Bihar, and an electric locomotive factory at Madhepura, Bihar, respectively. These projects will entail an investment of almost Rs 400 billion.
  • Focus on the modernisation of railway stations has continued. Plans are afoot to develop about 400 stations across the country with assistance from the private sector, state governments, foreign governments and multilateral funding institutions. In July 2016, the Habibganj station redevelopment project was awarded to a consortium of Bansal Construction Works and Prakash Asphalting and Toll Highways on a public-private partnership (PPP) basis.
  • On the financing front, during 2015-16, IR generated an investment of Rs 150 billion through the PPP route. DFCs continued to report sound progress. In 2015, the Durgauti-Sasaram section was commissioned. Overall, 290 km of track work has been completed. So far, contracts worth Rs 286 billion have been finalised under the DFC project. In terms of award, about 83 per cent of civil works have been awarded under the Eastern DFC, while 84 per cent have been awarded under the Western DFC. Capex increased from Rs 29 billion in 2014-15 to Rs 85 billion in 2015-16 and there is a fivefold increase in earthwork and concreting work on the Rewari-Iqbalgarh section of the Western DFC and the Khurja-Kanpur section of the Eastern DFC.
  • In February 2016, Dedicated Freight Corridor Corporation of India Limited also finalised the Private Freight Terminal Policy to encourage container train operators to use the DFCs.
  • Meanwhile, new DFCs on the East-West, North-South and East Coast Corridors are being planned and these are expected to cost $55 billion.
  • During 2015-16, the Ministry of Railways (MoR) completed the construction of about 2,800 km of broad gauge lines, much more than the average length of 1,528 km added during the period 2009-14. About 540 km of broad gauge lines were commissioned in the north-eastern region during the past year. Several big projects were commissioned including two mega bridges over the Ganga river at Patna and Munger. During 2014-16, 3,105 route km of tracks have been electrified.
  • With regard to new projects, in June 2016, the MoR laid the foundation stone for the 70 km Ahmedabad-Mehsana railway line in Gujarat. Notably, for the first time ever IR decided to launch three annuity-based third line development projects worth Rs 30 billion on the Badrak-Nargundi, Nagpur-Wardha and Kazipet-Vijayawada routes.
  • During the past 12-15 months, the MoR signed MoUs with eight states – Haryana, Odisha, Andhra Pradesh, Maharashtra, Chhattisgarh, Kerala Telangana and Karnataka – to form joint venture (JV) companies. These JVs will mobilise resources for the implementation of a selected basket of railway projects in these states. Overall, 17 states have consented to the formation of JVs with the MoR.
  • As part of the MoR’s initiatives to install 1,000 MW of solar photovoltaic capacity, a 1 MW solar power plant was commissioned at the Shri Mata Vaishno Devi Katra railway station in Jammu & Kashmir in 2015. The ministry is also in the process of tapping wind energy resources to supplement its energy needs. In 2015, Railway Energy Management Company Limited commissioned a 26 MW wind-based project in Jaisalmer, Rajasthan, at a cost of Rs 1.6 billion.
  • A number of digital initiatives were also launched by the MoR to improve the travel experience for passengers. These include the launch of a complaint management system and an e-catering facility at 100 stations as well as the rationalisation of the passenger reservation system.