Expanding Scope: Measures to boost rolling stock production

Measures to boost rolling stock production

Between 2012-13 and 2016-17 (till October 2016), the year-on-year growth in rolling stock witnessed a declining trend. However, in 2015-16 there was an increase in production, with wagon production recording the maximum growth of 32.5 per cent, followed by coaches at 6.78 per cent and locomotives at 0.83 per cent. During the five-year period, a total of 17,651 coaches, 2,895 locomotives and 52,148 wagons were acquired by Indian Railways (IR). The major reasons for the decline in the acquisition of rolling stock by IR include slow progress in upcoming manufacturing units and reduced rolling stock requirements vis-à-vis available manufacturing capacity.

Key initiatives

In the past few years, IR has undertaken a number of initiatives to augment indigenous production of cost-effective rolling stock. A modern manufacturing facility has been commissioned at the Integral Coach Factory (ICF), Chennai, to produce Linke Hofmann Busch (LHB) coaches that have greater comfort levels, carrying capacity, speed and lifespan. The Chhapra factory, with an installed capacity of manufacturing 100,000 wheels per annum, started the production of wheels for passenger trains. In mid-2016, the plant delivered its first consignment of 250 wheels. Besides, an electric loco assembly and ancillary unit has been commissioned at Dankuni, West Bengal, and a diesel electric multiple unit (EMU) factory has been commissioned at Haldia. Further, Bharat Heavy Electricals Limited manufactured the first air-conditioned EMU with a three-phase propulsion system at the ICF. A similar EMU has been manufactured by Medha Servo Drives Private Limited and is currently in the final stages of testing.

The segment has received a major push with the central government’s Make in India initiative. The first semi-high speed train, the Gatimaan Express was built at the Railway Coach Factory (RCF), in Kapurthala, Punjab, under the initiative. The cost of the train is around Rs 500 million (10 coaches costing Rs 25 million to Rs 30 million each and two power cars). Meanwhile, IR is producing a 200 kmph fit rake based on LHB technology domestically, at the RCF, Kapurthala, which is expected to be commissioned soon. Also, a high speed diesel multiple unit rake capable of running at 160 kmph (with a potential of 200 kmph) is currently under design and manufacturing at the ICF, Chennai, and is likely to be launched next year. The other sanctioned projects include the setting up of a traction alternator manufacturing factory for high horsepower (HP) diesel locomotives at Vidisha, the augmentation of production capacity from 200 to 250 high HP locos per year including facilities for the fabrication of crank cases for high HP diesel locomotives at the Diesel Locomotive Works, Varanasi, and the setting up of a forged wheel factory at Rae Bareli by Rashtriya Ispat Nigam Limited.

IR has signed an agreement for setting up the Diesel Locomotive Factory (DLF) at Marhowrah, Saran district, Bihar, for the procurement and maintenance of mainline most modern high power diesel electric locomotives with GE Diesel Locomotive Private Limited. An agreement has also been signed with Alstom for setting up an electric locomotive factory at Madhepura, Bihar, for the procurement and maintenance of electric locomotives. The agreements signed with GE Diesel Locomotive and Alstom are major public-private partnership and foreign direct investment tenders of IR and together will be one of the highest foreign direct investment in the country, amounting to an order book of almost Rs 400 billion.

Going forward, IR’s key focus areas will be the induction of coaches with a higher speed potential of 160-200 kmph; a switch from ICF coaches to LHB coaches; induction of LHB coaches in mail and express trains; and the induction of heavy haul (25 tonne or above axle load) freight bogies and wagons. According to experts, orders for wagon procurement are expected to be in the range of 18,000-19,000 units per year for the period from 2017 to 2020.

Future outlook

As per IR’s proposed investment plan for 2015-16 to 2019-20, an investment of Rs 1,020 billion is expected to be made in the rolling stock segment. Besides annual procurement plans, big-ticket projects such as the dedicated freight corridor will also offer opportunities for rolling stock manufacturers. In the coming years, there will be a greater thrust on indigenous procurement and, in this regard, IR is stepping up its production capacity and setting up 10 new units (five coach, three wagon and two locomotive). It is also setting up three rolling stock locomotive factories. Besides, the capacity of its existing units is being expanded further.

Slow progress on rolling stock manufacturing projects is the most pressing concern, as this increases the burden on coach production units that are already operating at or over 100 per cent capacity utilisation levels. Further, due to delays in the commissioning of upcoming manufacturing units, IR has repeatedly failed to meet its annual rolling stock acquisition targets. Key reasons for this include delays in acquiring land and obtaining clearances from the government, and a reduction in wagon requirements vis-à-vis available capacity (raising doubts over the feasibility of upcoming wagon manufacturing units). Nonetheless, manufacturing of rolling stock and components/subcomponents will get a push with the Make in India initiative.