Recording the highest-ever capital expenditure allocation in the 2018-19 budget, the railways has been one of the major beneficiaries of the country’s growing focus on infrastructure development. The budget has allocated a large corpus of Rs 1.48 trillion to the sector, with a primary focus on big-ticket projects such as high speed rail (HSR) and station redevelopment. India Infrastructure Research tracked a total of 333 projects with costs higher than Rs 5 billion, requiring a combined investment of Rs 17.68 trillion.
Segment-wise, HSR accounts for the largest share of investment entailed by the top projects at Rs 12.56 trillion. This is followed by new line works at Rs 2.28 trillion, line doubling at Rs 1.67 trillion and gauge conversion at Rs 576 billion. In terms of number of projects, new line works account for the largest share at 41 per cent, followed by line doubling at 35 per cent, gauge conversion at 15 per cent, electrification and HSR at 3 per cent each, station redevelopment at 2 per cent and semi-HSR at 1 per cent.
Status-wise, eight projects worth Rs 92.7 billion were completed, 274 projects worth Rs 5.11 trillion are currently under construction and 51 projects worth Rs 12.48 trillion are at the planning stage. Overall, a huge impetus has been given to big-ticket projects, with the top six planned projects (in terms of investment) entailing a total cost of Rs 11.41 trillion.
In the past one year, eight key projects (over Rs 5 billion in value) were completed. The majority of these were new lines, followed by doubling and gauge conversion projects. Key among these were the Gulbarga (Kalaburagi)-Bidar New Line Railway Project (Rs 15.42 billion); the Vijayawada-Narasapur, Gudiva Da-Machilipatnam and Bhimavaram-Nidadavolu line doubling projects (Rs 14.29 billion); the Ramanagaram-Mysore line doubling project (Rs 13.09 billion); the Hassan-Bengaluru via Shravanabelagola new line project (Rs 12.9 billion); and the Jharsuguda-Barpali new line project (Rs 10.07 billion).
Projects under way
With regard to the 274 under-construction projects, new line works account for the largest share in investment required (37 per cent) at Rs 1.87 trillion, followed by line doubling (30 per cent), HSR (22 per cent) and gauge conversion (10 per cent) projects requiring investments of around Rs 1.55 trillion, Rs 1.11 trillion and Rs 506.43 billion respectively.
In terms of the number of projects, the new line segment accounts for the largest share at 41 per cent. Some of the key projects (valued at over Rs 50 billion) currently under construction are the Bengaluru-Satyamangalam (260 route km), Indore–Manmad (368 route km) and Jiribam-Imphal (98 route km) new line projects, accounting for almost 16 per cent of the total investment required for the segment, and fall under South Western Railway, Central Railway and North Frontier Railway respectively.
The next segment with the highest number of projects is line doubling with 108 projects currently under way. The top three (in terms of investment) are the Bhadrak-Vizianagaram, Kottavalasa-Koraput and Hospet-Hubli-Londa-Tinaighat-Vasco da Gama line doubling projects, spanning lengths of 525, 354 and 352 route km respectively and entailing a combined investment of Rs 143.75 billion. While the Bhadrak-Vizianagaram and Kottavalasa-Koraput projects fall under East Coast Railway, the Hospet-Hubli-Londa-Tinaighat-Vasco da Gama project falls under South Western Railway.
Further, with 44 projects currently under way, gauge conversion is the next segment in terms of the number of projects under construction. The top three in this segment are the Lumding-Silchar, Rangiya-Murkongselek and Gwalior-Sheorpurkalan projects that together entail an investment of Rs 120.6 billion. While the first two projects fall under North Frontier Railway, the last falls under North Central Railway.
While massive investments have been planned for the HSR segment, the only project that has been launched so far (September 2017) is the 508 km Mumbai-Ahmedabad HSR corridor project. It is being implemented by a special purpose vehicle – National High Speed Rail Corporation Limited. Of the total project cost, around 81 per cent is being provided by the Japan International Cooperation Agency through soft loans at a minimal interest of 0.1 per cent for a period of 50 years. As of January 2018, the Gujarat government had commenced the land acquisition process, which has been targeted for completion by March 2018. The construction work, however, is expected to commence by September 2018 with completion scheduled for December 2023.
Besides, another key project currently under implementation is the 1.32 km Chenab river bridge project worth Rs 12.5 billion under the Jammu-Udhampur-Katra-Qazigund-Baramulla Railway Line Project. As of November 2017, around 70 per cent of the construction work had been completed and the project is slated for completion by June 2019.
Besides projects under construction, massive investments have also been envisaged for upcoming projects, with a combined investment of Rs 12.47 trillion in the identified top projects. Segment-wise, the HSR segment accounts for the highest share of 92 per cent at Rs 11.45 trillion, followed by new lines at Rs 357 billion (3 per cent), semi-HSR at Rs 324 billion (3 per cent), and station redevelopment at Rs 180 billion (1 per cent).
Of the 51 planned projects, the new line segment accounts for the highest share in the number of projects at 39 per cent, with the top five (in terms of investment) – Salona-Khumtai, Una-Hamirpur, Talcher-Gopalpur, Armoor-Adilabad and Vijayawada-Guntur – spanning a route length of over 255 km. The Salona-Khumtai new line project alone accounts for over 35 per cent of the overall investment envisaged for the five projects.
Meanwhile, the HSR and station redevelopment segments account for the second highest share in the number of planned projects at seven each. The HSR projects are the 1,368 km Mumbai-Chennai HSR corridor, the 1,318 km Delhi-Mumbai HSR corridor, the 1,754 km Delhi-Chennai HSR corridor, the 798.5 km Mumbai-Nagpur HSR corridor (Phase I of the Mumbai-Kolkata corridor), the 458.49 km Delhi-Amritsar HSR corridor, the 1,368 km Delhi-Kolkata HSR corridor, and the 492 km Chennai-Mysore HSR corridor.
With respect to station redevelopment projects, the top two (in terms of investment) – the New Delhi and Surat railway station projects – entail an investment of Rs 100 billion and Rs 36.4 billion respectively. As of January 2018, Indian Railway Stations Development Corporation Limited (IRSDC) had decided to implement the Surat railway station project on a public-private partnership basis as against the earlier proposal of executing it on an engineering, procurement and construction basis. Project construction is expected to commence by end-2018 along with the development of a multimodal transportation hub. With regard to the New Delhi railway station project, the Ministry of Railways is in advanced talks with the South Korean government for taking up the project. The former has already submitted a detailed plan to South Korea with the latter nominating three companies – Korail, Lotte Asset Development and Korea Rail Network Authority – to take up the project. An MoU is likely to be signed soon between the two governments.
Besides, other key upcoming projects include the four semi-HSR projects – the 1,384 km Delhi-Mumbai, 244 km Delhi-Chandigarh, 1,450 km Delhi-Kolkata, and 495 km Chennai-Bengaluru-Mysore projects – which are expected to entail a combined investment of Rs 323.5 billion. As per the latest update, plans for fencing the Delhi-Kolkata and Delhi-Mumbai corridors have been sent to the cabinet for approval, while tenders for the Delhi-Chandigarh projects are expected to be floated by early 2018.
The road ahead
Overall, given the ambitious expansion and modernisation plans of Indian Railways, the sector is likely to witness the launch of several big-ticket projects going forward. Key among them being those for the three new dedicated freight corridors – East-West, North-South and East Coast corridors – worth Rs 3.57 trillion that are currently at the planning stage. Further, safety-related works (including signalling and telecommunication) valued at Rs 1.19 trillion are also in the pipeline for execution in the next two years (2018-19 and 2019-20). However, despite the abundance of opportunities, delays in project implementation and extension of completion deadlines have been some of the most daunting barriers to progress. In contrast, the recent focus on private participation, especially in station redevelopment projects, may bring about a paradigm shift in the pace of project implementation through the infusion of fresh capital and modern technologies.